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Data released Wednesday showed activity in the services sector increased in February.

The Institute for Supply Management’s services index registered at 53.5 in February, up from January’s 52.8 reading and above the 52.5 economists had expected. Readings above 50 indicate an expansion in activity, while those below 50 reflect a contraction.

Meanwhile, the ISM’s prices paid index rose to 62.6 from 60.4 the month prior, as company costs continued to increase. The employment index also ticked higher, coming in at 53.9, compared with 52.3 in January.

The data didn’t come without signs of caution, though.

“February was the third month in a row with all four subindexes that directly factor into the Services PMI — Business Activity, New Orders, Employment and Supplier Deliveries — in expansion territory, the first time this has happened since May 2022,” ISM’s business survey committee chair Steve Miller said in the release. “Slightly slower growth in the Business Activity Index was more than offset by growth in the other three subindexes.”

He added: “Anxiety continues, however, over the potential impact of tariffs. Some respondents indicated that federal spending cuts are having negative impacts on their business forecasts.”

The services data follows a weaker-than-expected reading on activity in the manufacturing sector on Monday, which was weighed down by tariff-related impacts.