NEW YORK, July 5: Growth in the US service sector rose unexpectedly in June, while the job market also appeared to pick up some steam, according to reports on Thursday that signalled strength in the economy.

The Institute for Supply Management's services index rose to 60.7 in June from 59.7 in May. Analysts had expected the index to ease to 58.

A number above 50 indicates growth in the sector.

The survey's employment index edged up to 55 -- its highest in just over a year -- from 54.9 in May. Its new orders index eased.

“It's good news for the economy. It shows the services sector is continuing to do well. The manufacturing report also came in very strong. Between the two of them, things are looking pretty good for the economy right now,” said David Wyss, chief economist at Standard & Poor's in New York.

ISM on Monday had reported that manufacturing growth accelerated in June.

The data showing stronger-than-expected growth in the services sector and the jobs market pushed government bond prices lower and yields higher. Stocks slipped on worries over rising bonds yields.

A number of reports on job trends in the United States offered evidence of continued strength in the labour market, albeit with some pockets of weakness.

Private employment services company ADP Employer Services said US private employers likely added 150,000 jobs in June, more than the three-month average ending that month of 103,000 and well above the consensus forecast for a 100,000 gain.

Joel Prakken, chairman of Macroeconomic Advisers LLC, which jointly developed the ADP report, said accelerated private sector job gains in June were consistent with an upturn in overall economic growth in early 2007.

JOB MARKET SIGNALS: Planned US layoffs fell by 22pc in June from May, as some key sectors in manufacturing, such as the automotive industry, cut far fewer workers than a month ago and a year earlier, said Challenger, Gray & Christmas Inc., an employment consulting firm.