NEW YORK (Reuters) - The pace of growth in the U.S. economy's service sector increased in June by the fastest pace in seven months, according to an industry report released on Wednesday.

The Institute for Supply Management (ISM) said its index of non-manufacturing activity rose to 56.5 from 52.9 the month before. The reading was above expectations of 53.3 from a Reuters poll of 62 economists and was the highest reading since November.

A reading above 50 indicates expansion in the service sector and a reading below 50 indicates contraction.

The business activity index rose to 59.5 from 55.1 the month before. That was just above expectations of 55.5.

The employment index rose to 52.7 from 49.7 a month earlier. New orders climbed to 59.9 from 54.2. The prices paid index fell to 55.5 from 55.6.

The pace of growth in the U.S. economy's manufacturing sector increased in June, according to an earlier ISM report.