German strength propelled the recovery of the euro zone's dominant services economy in November, surveys showed on Friday, after China declared a new prudent monetary stance to help regulate its fervent growth.
With U.S. jobs and industry data due later on Friday expected to confirm a sense the economic recovery there has become self-sustaining, the chances of the global economy tipping back into recession are disappearing.
In the euro zone, purchasing managers indexes -- taking in more than 2,000 businesses ranging from banks to hotels -- rose to 55.4 from 53.3 in October, easily above the 50 mark separating growth from contraction.
That strengthening recovery, however, was dominated by France and Germany as debt-laden members showed scant sign of progress.
The risk of a double-dip is perhaps receding based on the recent activity numbers we've been getting, said James Knightley, senior economist at ING Commercial Banking.
We'd still suggest the recovery is going to be pretty soft relative to previous instances because of fiscal austerity, and the sovereign debt story in the euro area.
The services PMIs made gloomy reading for two of the countries caught in the middle of the euro zone debt crisis.
In Ireland, service sector growth was sluggish. Spain, tipped by a small minority of economists as next in line to follow Ireland for an EU/IMF bailout, saw its service sector contract for the fourth month in a row in November.
Better-than-expected euro zone sales figures on Friday, which showed 0.5 percent growth month-on-month in October, were similarly powered by Germany, while the UK services PMI showed a slight slowdown in what has so far been a strong recovery.
The official PMI survey of China's services companies showed growth slowed sharply, with the index slipping to 53.2 in November from 60.5 in October, a nine-month low.
However, China's far more dominant manufacturing economy revved up production in November, PMIs showed on Wednesday.
While Europe's debt burden and austerity measures will keep economic growth in the low single-digits for the foreseeable future, Chinese policymakers announced a change in posture to help keep in check their fast-growing economy.
The Communist Party's top leaders decided to announce a switch to a prudent monetary policy from a moderately loose stance, a change that could pave the way for more interest rate increases and lending controls.
Chinese and global markets shrugged off the Politburo announcement and the PMIs, with investors taking the view that the new wording was an affirmation of the gradual tightening that Beijing has already started to implement in recent months.
It means that all sort of monetary policy tools to control liquidity and to control inflation can now be used, said Ken Peng, an economist with Citigroup in Beijing.
In the past we've been clearly focusing on administrative measures. Going forward we could be using more price adjustments via interest rates, he said, adding that he expected five rate increases by the end of next year.
Payrolls data in the U.S. due at 1330 GMT are expected to show the economy added 140,000 non-farm jobs in November, with private hiring increasing by more than 100,000 for the fifth month running, according to a Reuters survey.
In October, U.S. employment increased by 153,000.
Economists also expect the U.S. non-manufacturing ISM PMI survey, due at 1500 GMT, to rise to 54.8 in November from 54.3, which would give further credence to perceptions that the U.S. economic recovery has gained some momentum of its own.
There is a lot of optimism that the economy is on the rebound and definitely has turned around, said Barbara Byrne Denham, chief economist of Eastern Consolidated in New York.
(Additional reporting by Zhou Xin and Simon Rabinovitch in Beijing, and Lucia Mutikani in Washington, Editing by Patrick Graham)