(Bloomberg) -- Euro-area economic confidence improved as the region bounces back from its mild recession in the second half of last year.

A sentiment indicator published Thursday by the European Commission rose to 96 in May from 95.6 the previous month — just less than analysts in a Bloomberg survey had predicted. 

Readings for industrial confidence and services were better than in April, while consumer sentiment was also up.

Growth in the 20-nation currency bloc surpassed expectations in the first quarter, while business surveys by S&P Global last week signaled the recovery is taking hold as private-sector business activity reached its highest level in a year. The labor market, too, remains strong. Unemployment fell to 6.4% in April from 6.5% the previous month, Eurostat said Thursday.

The retreat in inflation, meanwhile, is likely to see the European Central Bank lower its deposit rate by a quarter-point next week. It currently stands at a record-high 4%.

--With assistance from Mark Evans and Joel Rinneby.

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