Feb. 5 (Bloomberg) — Service industries expanded more than forecast in January as the biggest part of the U.S. economy overcame the effects of snow and freezing temperatures to boost hiring by the most in more than three years.

The Institute for Supply Management's non-manufacturing index increased to 54 from 53 in December, the Tempe, Arizona- based group said today. Readings greater than 50 signal expansion. The group's employment gauge was the strongest since November 2010, even as a separate report showed company payrolls grew less than projected.

The pickup in services contrasts with the group's manufacturing report this week that indicated factories expanded at a slower pace as colder-than-usual weather slowed demand and production. Retailers, management companies and professional services such as accountants were among areas that improved last month, showing the recovery is on firmer footing going into 2014 as households reduce debt burdens and wealth improves.