01/05/2012 10:17 EST | Updated 03/06/2012 05:12 EST

Trade group: US service firms expanded at faster pace in December as economy gained strength

WASHINGTON - U.S. service companies, which employ 90 per cent of the workforce, expanded at a faster pace in December, helped by solid holiday sales and an economy that picked up strength in the final months of the year.

The Institute for Supply Management says its index of non-manufacturing activity rose to 52.6 in December, up from 52 in November. Any reading above 50 indicates expansion.

The trade group of purchasing managers surveys a range of businesses, including restaurants, hotels, retailers, financial service firms and construction companies.

The service sector has grown for two straight years. But activity had slowed for a third straight month in November, dropping to the lowest reading since January 2010.