Companies added 170,000 workers to their payrolls in January, boosted again by a surge in service-providing sector employment, according to data released by ADP Employer Services Wednesday.

The 170,000 increase is down from a revised 292,000 jobs added the month before, and slightly lower than the 200,000 economists surveyed by Thomson Reuters were expecting

Employment in the service-providing sector grew by 152,000 in January, after rising a revised 241,000 in December. The goods-producing sector saw an increase of 18,000 jobs in January and manufacturing employment increased by 10,000, while construction employment advanced 2,000.

Over the last three months, the monthly gains in employment shown in the ADP national employment report have averaged 223,000, compared to 163,000 per month over all of  2011, said Carlos Rodriguez, president and CEO of ADP. This is a positive development that we hope will continue throughout the course of 2012.

Small businesses, those with fewer than 50 employees, made up more than half of the job gains by hiring 95,000 workers.

Large companies with 500 or more employees hired only 3,000 new workers, while medium-sized businesses added 72,000 to their payrolls.

The ADP report, which does not measure government workers, typically sets the tone for Friday's highly anticipated monthly jobs report, but its figures have traditionally been above the government's numbers.

The Labor Department is expected to report non-farm payrolls growth of 150,000 and an unchanged unemployment rate of 8.5 percent, according to Reuters estimates.