Euro Zone Business Activity Slumps to Near 3-Year Low, Stirring Recession Fears

Euro zone business activity declined in October, hitting a near 3-year low according to the flash PMI report. This stirs worries about a recession.

The downturn was broad-based across the region. Germany saw contraction for the 4th straight month. France also saw a solid reduction in activity.

The declines were worse than expected. The composite PMI fell to 46.5 from 47.2, below forecasts of 47.4.

Forward-looking indicators were gloomy, with declining demand, falling optimism, and job cuts for the first time since 2021.

The data suggests the euro zone may enter a recession in Q4 after flatlining in Q3. The ECB meets Thursday and may change its 'higher-for-longer' rate narrative.