Germany's economic activity contracted at a faster pace in August, as revealed by the latest S&P Global data. The composite index, which measures output across both the manufacturing and service sectors, fell to 48.5 from 49.1 in July. A reading below 50 indicates economic contraction, signaling deeper troubles for the private sector.

Manufacturing took a significant hit, with the Purchasing Managers' Index (PMI) dropping to 42.1 from 43.2, defying expectations of a slight recovery. The service sector also stumbled, with its index slipping to 51.4 from 52.5, contrary to forecasts.

Meanwhile, the Eurozone narrowly avoided a recession, thanks to massive government spending programs. However, the private sector is already mired in economic decline, with Italy in particular relying heavily on subsidies to stave off a deeper crisis.