The US service sector grew at its fastest pace since records began in 1997 as business activity, new orders and employment indicators improved.

The Institute for supply Management (ISM) services index rose to 64.1 from 60.1 in June, exceeding the expectations of all economists surveyed. An index above 50 indicates expansion of activity.

The data highlight a sharp rebound in demand for services such as dining out and travel in recent months, thanks to vaccinations. The index of business activity jumped nearly seven points to 67, near a record high, as new orders accelerated.

At the same time, global demand is picking up. New export orders from US service providers are growing at their fastest pace since 2007.

However, the report also highlights that industries hit hard by the epidemic are unable to grow faster because of supply constraints, which have also pushed up price levels. The order backlog index remained high after hitting a record high in June, and inventories shrank for the second month in a row, indicating that demand continues to exceed supply.

The price paid by service providers jumped to 82.3, the highest level since September 2005. At the same time, the delivery time was extended and the supplier delivery index rose to the second highest on record.

There are signs that the difficulty of corporate recruitment has been reduced to some extent. The employment index rose to 53.8 after a contraction in June, representing employment growth.