A reading above 50 indicates expansion in the service sector and a reading below 50 indicates contraction.
The business activity index rose to 59.8 from 57.8 the month before. That was just above expectations of 57.4.
The employment index rose to 50.3 from 49.7 a month earlier. New orders climbed to 56.7 from 55.5. The prices paid index rose to 49.1 from 45.5.
The pace of growth in the U.S. economy’s manufacturing sector increased in March, according to an earlier ISM report.
— Reuters contributed to this report.