Service sector activity in the U.S. unexpectedly grew at a slightly faster rate in the month of November, according to a report released by the Institute for Supply Management on Wednesday.

The ISM said its services PMI inched up to 52.6 in November after climbing to 52.4 in October, with a reading above 50 indicating growth. Economists had expected the index to edge down to 52.1.

With the unexpected increase, the services PMI reached its highest level since hitting 53.5 in February.

The uptick by the headline index came amid a modest increase by the business activity index, which crept up to 54.5 in November from 54.3 in October.

The employment index also rose to 48.9 in November from 48.2 in October. While still in contraction territory, the index reached its highest reading since hitting 50.7 in May.

The report also said the backlog of orders index surged to 49.1 in November from 40.8 in October, marking its largest single-month increase since June 2022.

Meanwhile, the ISM said the new orders slid to 52.9 in November from 56.2 in October, although the reading above 50 still indicated the six straight month of growth.

On the inflation front, the report said the prices index slumped to 65.4 in November from 70.0 in October, hitting its lowest reading since April.

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