The Institute for Supply Management released a report on Wednesday showing an unexpected increase by its reading on U.S. service sector activity in the month of December.
The ISM said its services PMI climbed to 54.4 in December from 52.6 in November, with a reading above 50 indicating growth. Economists had expected the index to edge down to 52.3.
With the unexpected increase, the services PMI reached its highest level since hitting 56.0 in October 2024.
The unexpected increase by the headline index partly reflected notably faster growth in new orders, as the new orders index surged to 57.9 in December from 52.9 in November.
The employment index also jumped to 52.0 in December from 48.9 in November, suggesting the first increase in service sector employment in seven months.
The ISM said the business activity index also climbed to 56.0 in December from 54.5 in November, reaching its highest level in a year.
On the inflation front, the prices index fell to a nine-month low of 64.3 in December from 65.4 in November but remained above 60 for the thirteenth straight month.