Global PMI nears 2-year high on manufacturing drive

LONDON, Nov 4 (Reuters) - Global services and manufacturing activity expanded at its fastest pace since late 2007, but the pace of layoffs accelerated slightly in October, a survey showed on Wednesday.

The Global Total Output index, produced by JP Morgan with research and supply management organisations, rose to 54.2 in October from 53.2 in September. This is the third consecutive month the index has been above the 50.0 mark that divides growth from contraction.

"The October PMI data show that the global recovery is gaining traction, with activity and new orders rising at rates last seen at the end of 2007," said David Hensley, a director at JP Morgan, which sponsors the data.

The output index is consistent with seasonally adjusted annualised rate of global GDP growth of around 3 percent during the quarter, JP Morgan said.

However, firms continued to slash jobs in a bid to cut costs and the employment index at 46.1 was below the break-even mark for the 18th consecutive month.

"The continued downturn in the labour market is cause for concern," Hensley said.

The Global Services index rose to 53.0 last month from 52.6 in September.

Earlier data showed the euro zone's dominant service sector expanded at its fastest pace in 22 months while in the UK the sector had its best month since August 2007.

Figures released in the United States showed its service sector, which represents about 80 percent of U.S. economic activity, expanded in October for the second consecutive month but at a slower pace than forecast.

The index combines survey data from countries including the United States, Japan, Germany, France, Britain, China and Russia.

(Reporting by Jonathan Cable; Editing by Andy Bruce)

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