Eurozone December flash services PMI 52.6 vs 53.3 expected

The Eurozone's December flash services PMI came in at 52.6, below the expected 53.3, down from 53.6 last month. The manufacturing PMI also fell short at 49.2 compared to the expected 49.9. These results reflect ongoing struggles in the German economy, indicating a general decline in activity across the euro area. Despite the slowing growth, the service sector remains relatively robust as companies do not report dissatisfaction with new business, leading to additional hiring. However, a reduction in order backlogs is causing firms to become increasingly cautious, underscoring that a genuine upturn in economic activity will hinge on a recovery in the manufacturing sector. Cost inflation in the service sector surged to a nine-month high, calling for careful monitoring by the European Central Bank, which is expected to confirm its stance of keeping interest rates unchanged during its meeting on December 18. Overall, the outlook for the Eurozone economy remains unstable, particularly with pressure from the German manufacturing sector.