A private trade group says the U.S. service sector grew in March at its fastest pace since 2007 as the economy adds jobs and consumer spending slowly increases.

The Institute for Supply Management's service index rose to 55.4 in March from 53 in February.

Economists had expected a reading of 54. Any reading above 50 signals expansion.

It is the strongest pace of growth since ISM revised how it measured the service sector in January 2008.

Meanwhile, the group says business activity soared to its strongest level since April 2006 and new orders are near a five-year high.

The service sector's recovery has been bumpy, lagging a resurgence in manufacturing amid high unemployment, slow wage growth and a rocky real estate market.