NEW YORK (CNNMoney.com) — The nation’s service sector expanded in September for the first time in more than a year, according to a report from a purchasing managers’ group released Monday.

The Institute for Supply Management’s non-manufacturing index rose to 50.9 last month from 48.4 in August. Economists surveyed by Briefing.com had expected a reading of 50, which is the point at which the index reflects expansion.

It was the second consecutive month of improvement in the index, which last indicated expansion in August 2008.

The services sector, which includes businesses such as banks, airlines and restaurants, makes up the bulk of economic activity in the United States.

The ISM’s new orders index rose 4.3 points to 54.2, while the business activity index added 3.8 points to 55.1.

Those gains “suggest that businesses outside of manufacturing are transitioning from recession to recovery,” according to Tim Quinlan, an economic analyst at Wells Fargo.

The index that measures employment in the sector edged up less than one point to 44.3, but it remains well below the level indicating job growth in the sector.

“Jobs are still a major concern,” said Ryan Sweet, senior economist at Moody’s Economy.com. “The employment index is weak and points toward a very slow improvement in the labor market.”

Still, the larger-than-expected rise in the overall number could mean that U.S. gross domestic product will come in at a 3% annual rate of growth during the third quarter, according to Sweet.

Prices paid by service sector firms fell sharply in September. The prices index sank 14.3 points to 48.8, indicating a significant reversal and decrease in prices paid from August, according to the report.

The ISM said 15 of the 18 service sectors in the survey expect to derive some benefit from the government’s economic stabilization program.

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