The U.S. services sector grew in March at its fastest pace in nearly four years, according to an industry report released on Monday.

The Institute for Supply Management said its services index jumped to 55.4, its strongest reading since May 2006, from 53.0 in February. That was the index's third consecutive monthly gain and was above the 54.0 median forecast of 70 economists surveyed by Reuters.

A reading above 50 indicates expansion in the sector.

The report's business activity index hit 60 in March, its highest level since April 2006, compared with 54.8 in February. The employment index edged up to 49.8 from 48.6 while new orders jumped to 62.3 from 55.0.

(Reporting by Steven C. Johnson; Editing by James Dalgleish)