U.S. Flash PMI hit 56.6 in January, up from 55.7 in December.
The "flash" reading - based on 85% of monthly replies - is the highest print since September 2013.
A reading above 50 indicates an improvement on the prior month.
From Markit's Chris Williamson:
US service providers reported a busy January, providing an important signal that that the economy remains in good health at the start of the year. Growth of business activity picked up from the already-robust pace seen in December, and optimism about prospects for the year ahead rose to one of the highest levels we've seen since the financial crisis. The flash manufacturing and services PMI surveys collectively suggest that the economy grew in the final quarter of last year at a rate of around 3.5%, and that the pace will have accelerated at the start of the year. The PMIs also suggest that job creation continues to run at a rate of around 200,000 per month, meaning the non-farm payroll numbers should recover from December's dip.
"The robust signals from the two PMI surveys therefore suggest that the FOMC should be comfortable in sanctioning a further tapering of the Fed's asset purchase programme at its January meeting," Williamson concluded.
