Economic activity in the U.S. service sector increased in March at a faster rate than in February, according to the Institute for Supply Management's nonmanufacturing index released today.

The institute's nonmanufacturing index rose to a reading of 55.4 in March from 53.0 in February. Readings of more than 50 indicate expansion.

The employment portion of the index, however, continued to contract in March with a reading of 49.8. Still, the rate of contract was slower than in February.