Growth in the U.S. services sector accelerated in March, climbing as the employment index returned to expansionary territory, an industry report showed on Thursday.
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The Institute for Supply Management said its services sector index rose to 53.1 in March, slightly under expectations for a read of 53.5 but comfortably ahead of the February read of 51.6.
The February report was the worst read for the index since February 2010 and reflected the effects of bad weather on business activity.
The March read marked the 51st straight month the index was above 50, the level that separates expansion from contraction, and was the latest sign the impact of the harsh winter was ebbing.
However, the pace of growth remained well below the seven-year high of 57.9 hit in August. The employment index rose to 53.6 from 47.5 in February, which had been the lowest read for the subindex since March 2010.
The gauge of business activity fell for a second straight month, slipping to 53.4 from 54.6 in February. Analysts were looking for a read of 55.2.
The new orders index rose to 53.4 from 51.3, its third straight monthly increase.