STORY: Euro zone business activity made a surprise return to growth in January.

S&P Global's flash Composite Purchasing Managers' Index - or PMI - climbed to 50.2 this month from 49.3 in December.

Anything below 50 is seen as a contraction, but above that means growth.

The index released Tuesday (January 24) is seen as a good measure of economic health.

January was the first time it had been above the 50 mark since June, and was ahead of analyst projections.

Firms also raised headcount at a faster rate this month - which could be a sign of growing optimism.

The employment index rose to a three-month high.

The bloc's key services index also surprised when it rose to a six-month high.

Manufacturing was still below the 50 mark however - coming in at 48.8 in January.

Though that was slightly better than a month before.

The bloc's modest growth could suggest its economic downturn is not as deep as feared.

Though analysts still predict a technical recession - that's two straight quarters of contraction.

Inflation is still a key issue in the bloc and the European Central Bank wants to fight it.

A Reuters poll showed market watchers believe the ECB will do 50 basis point interest rate rises at each of its next two meetings.