WASHINGTON – Strong consumer demand pushed a key measure of the economy’s service sector to its highest level in more than four years, the latest evidence that the economy is gaining strength and job growth could pick up in the new year.

The Institute for Supply Management, a trade group of purchasing executives, said Wednesday that its index of service sector activity rose to 57.1 in December. Any reading above 50 indicates growth.

Last month’s reading was the highest since May 2006 and marked the 12th straight month of expansion for the sector, which employs 80 percent of the work force. The index had plummeted to 37.2 in November 2008, at the height of the financial crisis. The sector contracted for all but two months in 2009, then began expanding last year.

A major reason for the gains is that people are spending more. Companies covered by the survey — everything from health care to retail to financial services — received the highest number of orders for business in five years. That, along with a solid year of expansion, suggests the broadly defined sector could be an engine of job growth in 2011.

Economists say increased demand for services could set off a virtuous cycle: Rising employment gives consumers the confidence — and cash — to spend more, and that prompts businesses to increase hiring.

Earlier Wednesday, payroll services provider ADP said the economy added 297,000 private-sector jobs last month, the biggest increase since the company began tracking employment 10 years ago. The U.S. government is scheduled to issue last month’s employment report Friday.

“The spending side of the economy has turned a corner — a necessary step toward promoting the employment growth that will put the economy into a clearly self-sustaining expansion,” said Pierre Ellis, an economist at Decision Economics.