U.S. services sector expansion eased slightly in April from a seven-month high in March on a dip in new business growth, but the pace of hiring in the sector accelerated to its highest since last June, an industry report showed on Monday.
Financial firm Markit said its "flash," or preliminary, reading of its Purchasing Managers Index for the services sector slipped to 57.8 in April from a final reading of 59.2 in March, which had been the highest level since August.
A reading over 50 signals expansion in economic activity.
Markit's April reading of employment at service companies, meanwhile, rose to a 10-month high of 55.4 from March's 54.0.
The services index's new business component pulled back slightly from the month before, when it had notched its highest level since September.
Markit's composite PMI, a weighted average of its manufacturing and services indexes, dropped to 57.4 from 59.2 last month.
Last week, Markit in its flash reading of U.S. manufacturing activity said the goods-producing sector's growth fell in April by the most in six months, although it remained solidly in expansion territory.
"Alongside a solid rise in output signaled by the sister manufacturing PMI survey, the robust growth signaled by the services survey points to the economy as a whole picking up speed again after a temporary soft patch at the start of the year," Markit Chief Economist Chris Williamson said in a statement.
The Markit surveys suggest annual gross domestic product growth could accelerate to around 3 percent in the second quarter from a very anemic first-quarter pace of around 1.0 percent, Williamson said.
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