Output from the services and manufacturing sectors in the 17 countries that use the euro shrank at the fastest rate in almost three years in May.

According to the composite Purchasing Managers’ Index – a survey of these sectors – output dropped to 46 from 46.7 in April.

While exceeding an initial estimate of 45.9, the May reading is still the lowest since June 2009.

The indicator has been below 50 for four months. Readings below 50 indicate contraction.

In the meantime, unemployment in the euro area stayed at 11% in April. This is the highest level since the single currency was introduced in 1999.

The European Central Bank (ECB) kept the benchmark interest rate at a record low of 1%, as predicted by a Bloomberg News survey.

However, as the European leaders try to resolve the debt crisis, some economists believe the ECB may soon be forced to lower rates and introduce more liquidity support for banks. The Group of Seven nations agreed to coordinate their response to Europe’s problems.

In the US, Labour Department figures show that US payrolls climbed by only 69,000 in May after a revised 77,000 gain in April that was less than initially estimated.

The median projection of a Bloomberg New survey of economists was for a 150,000 May increase.

The jobless rate rose to 8.2% from 8.1%. According to the survey, the unemployment rate was forecast to remain at 8.1%.

Unemployment has held above 8% since February 2009, the longest such period since monthly records began in 1948.

Separately, the US Institute of Supply Management manufacturing index recorded a considerable 1.3 point-drop to 53.5.

Meanwhile, economic activity in the non-manufacturing sector grew in May for the 29th consecutive month, beating expectations.

This article was compiled by Bank of Valletta for general information purposes only.