Italian Business Activity Stops Contracting as Services Pick Up

(Bloomberg) -- Italy’s private-sector economy unexpectedly stopped shrinking in December as the services sector grew at the fastest pace in three months.

IHS Markit’s Purchasing Managers’ Index climbed to 50.0 -- the dividing line between contraction and expansion -- defying economists’ forecasts for a third straight reading below that level.

The reading provides some solace after a gauge of manufacturing, published on Wednesday, signaled that the economy is flirting with a triple-dip recession. The government resolved a budget dispute with the European Union in late December, after a months-long standoff that had sent bond yields surging.

New orders increased for the first time since September and employment growth picked up.

A PMI reading for the 19-nation euro zone will be published at 10 a.m. Rome time.

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