Euro zone industrial output expanded more than economists forecast in August as the recovery gained momentum. Factory production in the euro zone rose 1% from July, the European Union’s statistics office in Luxembourg said today. That exceeded the 0.8% median forecast in a Bloomberg News survey of 38 economists. The decline in July was also revised to 1% from 1.5%. Encouraging indicators have begun to accumulate since the euro area returned to growth in the second quarter, ending a record-long recession. Factory output expanded for a third month in September, according to Markit Economics, and executive and consumer confidence has improved. Industrial output in Germany, Europe’s largest economy, rose 1.8% in August from July, today’s report showed. In France, production increased 0.2% from July, Spain rose 0.1% and Italy fell 0.3%. The “gradual recovery� seen by the European Central Bank has boosted equities. Europe continues to struggle with the legacy of the debt crisis now in its fourth year, including an unemployment rate of 12%. ECB President Mario Draghi said on October 2 the bank will keep key interest rates “at present or lower levels for an extended period,� based in part on the “broad-based weakness in the economy.� Economists see economic growth slowing to 0.2% in the third quarter after a 0.3% expansion in the three months to June.

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