The European Union's statistics office today revised its second quarter economic growth estimate up slightly in the latest sign that the bloc has left a protracted recession behind.

The 27 countries' combined gross domestic product grew 0.4% in the second quarter compared with the previous three-month period, when it shrank 0.1%, Eurostat said.

The agency, which had last month estimated growth of 0.3%, said the revision was due to more complete data from several member states.

Household spending underpinned the economic momentum in many countries, it added.

Eurostat left unrevised its 0.3% growth estimate for the 17 country euro zone. 

Compared with a year earlier, seasonally adjusted GDP was down by 0.5% in the euro zone and remained stable for the EU, revised up from estimated drops of 0.7% and 0.2%.

The revision came amid a string of recent positive data - from increased business optimism to higher manufacturing output and retail sales - that point to a steady increase in the bloc's economic activity.

Analysts said that the recent sharp rise in consumer confidence suggests that spending growth is likely to pick up further in the coming quarters. While they said they expect a further expansion of the economy in the third quarter, they warned that the continued weakness of the labour market is likely to limit the pace of the consumer recovery.

Europe's unemployment rate remains stubbornly high at 12.1%. In some countries hardest-hit by Europe's debt crisis, such as Greece and Spain, more than one in four people do not have a job.

Analysts say more dynamic growth will be needed to spur investment and job creation there.

But, even meagre growth in Europe provides a boon to the global economy. The EU, which now totals 28 nations following Croatia's accession in July, has a population of some 500 million and its annual gross domestic product stands at around $17.3 trillion.

Euro zone business sees best month in two years

Euro zone businesses had their best month in over two years in August as orders increased for the first time since mid-2011, a survey showed today, suggesting the region's economy will grow slightly this quarter.

Markit's euro zone Composite Purchasing Managers Index rose to 51.5 last month from 50.5 in July. It was the highest headline figure since June 2011, albeit revised down slightly from an initial flash reading of 51.7.

The forward-looking new orders index rose to 51, the first time above the 50 mark dividing growth and contraction since July 2011, which will come as welcome news to European Central Bank policymakers meeting this week.

"The euro zone recovery is looking increasingly broad-based, with more sectors and more countries emerging from recession," said Chris Williamson, chief economist at data collator Markit.

"Although the picture is improving, the survey is still consistent with only very modest economic growth," he added.

Indeed, there are still major differences between Europe's two most important economies. The composite PMI for Germany, the euro zone's largest, jumped to a seven-month high of 53.5, but the French PMI dipped to 48.8 from 49.1.

Williamson said the euro zone composite PMI, compiled from a survey of thousands of companies across the euro zone and viewed as a good gauge of growth, suggested the euro zone economy would expand 0.2% in the current quarter.

That is in line with predictions for growth for the remainder of the year in a recent Reuters poll.

The euro zone escaped from a one and a half year-long recession last quarter with 0.3% growth, pulled up by Germany and France.

The PMI covering the dominant service sector bounced to 50.7 from July's 49.8, the first time it has risen above the break-even point since the start of 2012. Businesses' optimism about the future also rose to a 17-month high.

But firms were not confident enough yet to start hiring again. They cut staff for the 20th consecutive month, and at a faster pace than in July.

"Ongoing job losses suggest the ECB's principal focus will be on reassuring markets that rates will not rise for the foreseeable future," Williamson said.