The service sector boomed in August, while factory orders sank more than expected a month earlier, according to two reports released Thursday.

The Institute of Supply Management's measure of the non-manufacturing sector for August came in at 58.5, blowing away expectations for a reading of 56.8 by a survey of Thomson Reuters analysts and following the 55.7 reading reported in the prior month.

A reading above 50 indicates expansion in the service sector, while a reading below 50 signals contraction.

"Logistics, tariffs and employment resources continue to have an impact on many of the respective industries," the institute said in a statement. "Overall, the respondents remain positive about business conditions and the economy."

A separate report from the Commerce Department showed factory orders for July falling 0.8 percent, greater than the 0.6 percent decline expected by a survey of Thomson Reuters analysts and following an increase of 0.7 percent a month earlier.