U.S. private employers added more jobs than expected in January, underscoring views the employment picture is slowly improving.
The private sector added 187,000 jobs in January compared with a downwardly revised gain of 247,000 jobs in December, a report by payrolls processor ADP Employer Services showed on Wednesday. The December figure was originally reported as a gain of 297,000 jobs.
Bottom line, even with the Dec downward revision, the two month average is a solid 217,000 and certainly a positive for economic activity, said Peter Boockvar, equity strategist at Miller Tabak + Co in New York.
The January ADP figure was also above economist expectations for job gains of 145,000.
The ADP figures come ahead of the government's much more comprehensive labor market report on Friday, which includes both public and private sector employment.
However, ADP figures last month turned out to be much stronger than what the government report showed, adding to doubts about the reliability of ADP as a predictor of payrolls.
Even though most economic indicators lately have suggested the United States is picking up steam, job creation has been slow since the end of the recession in June 2009.
Analysts have closely watched data on private payrolls, which tend to show the bulk of new job gains.
Friday's Labor Department report is expected to show a rise in overall nonfarm payrolls of 145,000 in January, based on a Reuters poll of analysts, but a rise in private payrolls of 155,000.
A separate report Wednesday showed the number of planned layoffs at U.S. firms in January rose 20 percent from the previous month to 38,519, but the tally was still the lowest for a January since at least 1993.
Noting that January was typically a month of large job cuts, global outplacement company Challenger, Gray & Christmas said in its report that the slowdown in job cuts that began in the latter half of 2010 appeared to be continuing.
(Additional reporting by Angela Moon, Editing by Chizu Nomiyama)