A key gauge of activity in service industries, which is about 80 percent of U.S. economic activity, went up from 46.4 to 48.4. Though still below 50, the dividing line between contraction and expansion, it was the best reading by the Institute for Supply Management’s service sector survey in the past 11 months.

Earlier, this measurement rose to as high as 52.9, the first reading to indicate expansion since January of last year.

Analysts have said that this improvement was due to the big boost provided by the government’s most successful stimulus program yet, the Cash for Clunkers Program that has breathed life and profit in the businesses of U.S. automakers.

The Obama administration was upbeat in reporting the progress of the stimulus plan they provided in easing the effects of the recession in the U.S. economy. Vice President Joe Biden said in a speech delivered at the Brookings Institution that the $787 billion economic stimulus program has by far exceeded expectations and have changed greatly the way that the economy has progressed.

“Instead of talking about the beginning of a depression, we are talking about the end of a recession,” Biden remarked. But some critics, especially Republicans, charged that Biden’s comments ignored the fact that millions of Americans remain unemployed.

Economists have closely watched initial jobless claims as a gauge to measure whether the hiring practices of companies have spiked up or remained negative on the average.

Unemployment claims are far removed from the 674,000 high in the first week of April, but are still running above 350,000, the line viewed by economists as a healthy level of the labor market. The current figures today run from 4,000 to 570,000.

All of this contributes to sectors such as the Service industry experiencing a slight improvement in their over-all performances. Most retailers still posted sales declines even tough some of them have also experienced improvement disproving many analysts’ expectation. Real estate, health care and social assistance, and transportation and warehousing showed improvement compared to their previous showing, while 12 other service industries, led by companies that concentrates on management and support services to other businesses, lagged behind and contracted for the period.