The U.S. service sector expanded in September at a faster pace than expected, according to a report released on Monday.

The Institute for Supply Management's services index rose to 50.9 last month from 48.4 in August, above economists' median forecast for a rise to 50.0. The dividing line between growth and contraction is 50.

The services sector represents about 80 percent of U.S. economic activity, including businesses such as banks, airlines, hotels and restaurants.

(Reporting by Nick Olivari; Editing by James Dalgleish)