The Institute for Supply Management released its non-manufacturing purchasing managers' index for the U.S. on Wednesday. The index soared to 60.3 in July from 56.0 in June, exceeding expectations for an increase to 56.2. It was the highest level since August 2005.
A reading above 50 indicates a growth in the service sector.
The increase was driven by rises in in business activity, employment and new orders.
The business activity/production index rose to 64.9 in July from 61.5 in June, the highest level since December 2004.
The ISM's new orders index increased to 63.8 in July from 58.3 in June, the highest level since August 2005.
The ISM's employment index climbed to 59.6 in July from 52.7 in June, the highest level since August 2005.