US businesses added 209,000 jobs in March, suggesting the recent improvement in the labor market was intact, a report by a payrolls processor showed today.
The ADP National Employment Report was slightly above economists' expectations for a gain of 200,000 jobs.
Analysts said it did not change their forecasts for the government's more comprehensive labor market report for March due on Friday, which includes both public and private sector employment.
Job gains for January and February were also revised up to 182,000 and 230,000, respectively. The report is jointly developed with Macroeconomic Advisers LLC.
A separate report showed the pace of growth in the vast US services sector slipped last month, while the forward-looking new orders gauge eased.
The Institute for Supply Management said its services index fell to 56.0 last month from 57.3 in February, shy of economists' forecasts for 57.0. The pullback in the rate of growth came after the index rose to its highest in a year in February.
"We think it's consistent with the current tone of economic activity and points to growth of about two per cent," said Millan Mulraine, senior macro strategist at TD Securities in New York.
The services sector accounts for about two-thirds of US economic activity.
The employment index improved to 56.7 from 55.7, while a measure of prices paid fell back to 63.9 from 68.4.
The day's data was overshadowed on Wall Street as investors focused on yesterday's comments from the Federal Reserve. US stocks were down about 1% in mid-morning trading.
The nonfarm payrolls report from the US Labor Department on Friday is expected to show a gain of 203,000 jobs last month, including a rise in private payrolls of 218,000.
The unemployment rate is seen holding steady at a three-year low of 8.3%.
Federal Reserve policymakers backed away from the need to begin a third round of monetary stimulus to boost the economy as the recovery gradually improves, minutes from the US central bank's last meeting showed on Tuesday.
Still, the Fed's assessment of the economy remained cautious. Economists expect growth to have slowed in the first quarter compared to the 3% annualized rate in the final months of last year.
