The Institute for Supply Management reported that its non-manufacturing index rose to 60.1 from 59.8, hitting the highest level since August 2005.
Analysts had predicted the decline to 58.5.
The manufacturing PMI index slid in September, while the services PMI unexpectedly turned to growth.
The new orders index declined to 62.8 in October from 63 in September.
The business activity index rose to 62.2 from 61.3 in September, touching the highest level over the past six months. Meanwhile, the employment index increased to 57.5 from 56.8.
