The pace of growth in the U.S. services sector accelerated in July, picking up from a three-year low as new orders surged to their highest level in five months, an industry report showed on Monday.

The Institute for Supply Management (ISM) said its services index rose to 56 from 52.2 in June, easily topping economists' expectations for 53.

The report likely added to views that economic growth will strengthen in the latter half of the year, as last week's ISM manufacturing report showed the sector's growth hit a two-year high in July.

The service sector figure surpassed even the high end of forecasts and matched what had been the high for the year reached in February.

A reading above 50 indicates expansion in the sector.

The forward-looking new orders component also hit its highest level since February, jumping to 57.7 from 50.8. But the employment index softened, falling to 53.2 from 54.7.

The exports index moderated to 49.5 from 47.5, suggesting demand from abroad remained weak even as the measure shrank less than in June. The imports index slowed to 50.5 from 53.5.