The Institute for Supply Management's US services index rose to a reading of 54.5 in May from 53.6 in April, compared with expectations for a smaller increase to a reading of 53.8 in a survey compiled by Bloomberg.
The ISM's reading is in line with some regional Federal Reserve bank measures and the S&P Global measure that indicated marginal expansion but was in contrast with others than pointed to contraction.
There were increases in the readings for production, new orders, prices and inventories but the reading for employment and supplier deliveries decreased.
The monthly national services reading from the Institute for Supply Management is reported as a headline index, with readings above 50 indicating expansion and those below 50 indicating contraction. Component indexes measure new orders, production, employment, and prices.
An increase in the index further above 50 is considered a sign of a strong US services sector and would be a positive for service-sector stocks. Rising prices would normally be a negative for both stocks and bonds.