By Joshua Jamerson 
 

Activity in the U.S. service sector remained solid in November, according to a report on Monday that suggested improved client confidence and strong economic backdrop in the U.S. helped growth.

Markit Economics' flash services purchasing managers index edged down to 54.6 from 54.8 in October. Economists surveyed by The Wall Street Journal expected a reading of 55.1. Readings above 50 indicate expansion.

Greater workloads and strong business confidence was a boon for U.S. service providers, who increased the pace of job creation to its strongest rate since July. Anecdotal evidence suggest new project launches and generally improving demand helped boost new orders in November, according to the report.

The service sector indicator comes after a flash index reading, also compiled by data provider Markit, last week pointed to a sustained acceleration in U.S. manufacturing growth in November, with production volumes and incoming new work both rising at the fastest pace since March 2015.

Chris Williamson, chief business economist at IHS Markit, said the manufacturing and service sectors are benefiting from stronger domestic demand, which suggest the nation's GDP is set to rise by 0.6% in the fourth quarter and further allude to interest rate hikes from the Federal Reserve.

"The solid business survey readings not only add to the widely held view that the Fed is near certain to raise interest rates at its December meeting, but also raise the prospect of more aggressive than previously anticipated interest rate hikes in 2017," Mr. Williamson said.

Write to Joshua Jamerson at joshua.jamerson@wsj.com

(END) Dow Jones Newswires

December 05, 2016 10:46 ET (15:46 GMT)