(Reuters) - The U.S. services sector grew in March at its fastest pace
in nearly four years, data showed on Monday, while pending sales
contracts for existing homes rose in February, suggesting steady
economic improvement.

Housing Market

The Institute for Supply Management said its service index grew in March
for a third straight month, jumping to 55.4, its strongest reading since
May 2006. That was up from February's 53.0 reading and above economists'
forecasts for 54.0 for March.

A reading above 50 indicates expansion in the sector.

U.S. stock indexes rose and the dollar pared losses against the yen
after the data, which bolstered hopes that the economy is recovering
swiftly from a deep recession.

Separate reports last week showed the U.S. manufacturing sector grew for
an eighth straight month in March, expanding at its fastest pace since
July 2004, while U.S. employers added jobs last month at the fastest
rate in three years.

"Looks like the good news continues," said Alan Gayle, senior investment
strategist at Ridgeworth Investments in Richmond, Virginia. "All this
suggests that the economic recovery is spilling over into job creation."

A separate report from the National Association of Realtors showed
contracts for pending sales of previously owned homes unexpectedly rose
in February.

Both reports "are generally supporting the idea that the recovery is
moving ahead," said Tom Porcelli, senior economist at RBC Capital
Markets in New York. "We're moving along here -- there's no better way
to state it."

The vast U.S. services sector accounts for some two-thirds of U.S.
economic activity, and analysts say growth in this sector bodes well for
consumer spending and overall employment.

The employment component of the ISM index rose slightly in March, while
new orders jumped as well.

The Conference Board, a private research group, said the U.S. job market
strengthened for a seventh straight month in March, with fewer Americans
having trouble finding work.

Economists say job growth is essential for continued economic expansion,
particularly as government stimulus spending starts to fade. And despite
improvements in the labor market, the jobless rate remained at 9.7
percent in March for a third straight month.
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Good news for America is, of course, bad news for the Republicans.