The July non-manufacturing PMI report from the Institute for Supply Management came in at 58.7.
Expectations were for the headline reading in July to rise to 56.5 from 56.0 in June.
ISM said this was the highest reading for the headline non-manufacturing index since its inception in January 2008.
The new orders sub-index registered a reading of 64.9%, a 3.7% increase from June and the highest reading since August 2005.
The report's employment sub-index also rose, to 56 from 54.4, marking the fifth-straight month of increasing employment activity in the non-manufacturing sector.
Following the report, Ian Shepherdson at Pantheon Macro said the report was strong across the board and showed no impact from the second quarter jump in gas prices.
June's reading was a 0.3 point decline from May, though the employment sub-index grew 2 points to 54.4 in May.
Here's the table showing the full sub-index breakdown from ISM.
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