WASHINGTON (AP) — Companies in the U.S. service sector expanded at their fastest pace in nearly eight years last month as sales and orders grew and employers ramped up hiring.

The Institute for Supply Management said Thursday that its service-sector index rose to 58.6 in August from 56 in July. It's the highest point since December 2005. Any reading above 50 indicates expansion.

A measure of hiring rose to 57, the most in six months. That's an encouraging sign for the job market because the service sector employs 90 percent of the U.S. workforce, including retail, construction, health care and financial services.

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