The US private sector shed a more than expected 742,000 jobs in March as employers slashed their headcount amid prolonged recession, payrolls firm ADP said today.

Analysts had forecast 663,000 job losses and the fresh data shows the recession that began in 2007 was taking a harsher toll on employment in the world's largest economy.

'The sharp employment declines among medium and small size businesses indicate that the recession continues to spread aggressively beyond manufacturing and housing-related activities to almost every area of the economy,' ADP said in a report.

The latest government monthly report showed that in February the unemployment rate jumped to a 25-year high of 8.1% from 7.6% in January as employers shed workers to cope with the economic slide.

Some analysts expect the rate to grow to double digits despite some recent economic and financial data showed the recession may be easing. In March, the job losses were spread across all sectors and all size of employers, but the rate of deterioration is faster for smaller companies and the services sector.

The ADP March report said non-farm private employment in the service-providing sector fell by 415,000. Employment in the goods-producing sector declined 327,000, the 27th consecutive monthly decline, while that in the manufacturing sector dropped by 206,000, its 37 consecutive decline.

ADP said that large businesses, defined as those with 500 or more workers, saw employment fall by 128,000, while medium-size businesses with between 50 and 499 workers declined 330,000. Employment among small-size businesses, defined as those with fewer than 50 workers, shrank 284,000.

ADP also said that in March, construction employment dropped by 118,000, its 26th consecutive monthly decline, and brings the total decline in construction jobs since the peak in January 2007 to 1.13 million.