The services sector in the U.S. grew at the fastest rate in more than five years during the second month of the year as the economic recovery begins to spread out from manufacturing, according to Bloomberg. On Thursday, the Institute for Supply Management reported that its index of non-manufacturing businesses moved higher to 59.7 in February, marking the highest level for the gauge since August 2005. The gain surprised economists who had expected a reading of 59.3 that would have signaled slowing growth.

Jeffrey Roach of Horizon Investments said, “The services sector is showing signs of a sustained recovery,” and the employment sub-index was also around a five-year high, reading 55.6 in February from 54.5 previously. Meanwhile, the Labor Department reported that productivity in the U.S. increased by 2.6% in the fourth quarter of 2010, moving up from 2.3% growth in the fourth quarter. Labor costs were seen lower by 0.6%, marking to bring the annual change to a 1.5% decrease, following a 1.6% drop in 2009.

Click here to read the story on services growth from Bloomberg News.

Click here for coverage of productivity, also from Bloomberg.