US private employers added a stronger-than-expected 201,000 jobs in August and new claims for jobless benefits fell last week to the lowest level in a month.

These are upbeat signals for a struggling labour market.

Another report today showed the pace of growth in the service sector accelerated last month due to growth in employment and exports.

The data is the latest to hint that the US economy is gaining a bit of steam but it also suggests growth is too weak to make a big dent in the still-high unemployment rate, keeping alive chances the Federal Reserve launches a new bond buying program as soon as next week.

"We wouldn't expect this improvement to persuade the Fed to hold fire next week," said Paul Ashworth, an economist with Capital Economics in Toronto.

The increase in private hiring, reported by payrolls processor ADP, was the largest since March and easily beat economists' expectations.

However, economists still think the government's more comprehensive employment report due on Friday will show only modest hiring during August.

"The implications really are that employment is growing but not at a strong pace," said Sean Incremona, an economist at 4Cast in New York.

The government's job report is expected to show nonfarm payrolls rose by 125,000 last month, while the unemployment rate is seen staying the same at 8.3 percent.

Analysts often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome. Over the last three months, the report has overstated gains in private payrolls by about 45,000 per month, according to analysts at Credit Suisse.

Housing and retail sales data have also suggested economic activity picked up early in the third quarter, although business spending is weakening and inflation is slowing.

The weak US economy is center stage in the presidential election campaign and weak jobs growth has caused deep concern at the Fed.

US stocks rose and prices for US government debt prices fell following the data's release and an announcement by European Central Bank chief Mario Draghi that the institution agreed to a new bond-buying program to try to stem Europe's debt crisis.

In a separate report, the US Labor Department said initial claims for state unemployment benefits dropped 12,000 last week to a seasonally adjusted 365,000.

It was the first drop in new claims since the week that ended August 4 and the lowest level since then as well.

The report has no direct bearing on Friday's employment report for August. The state of the labor market, particularly the unemployment rate, could determine whether the Fed offers additional monetary stimulus at its September 12-13 policy meeting.

Fed officials will also weigh a report released today that showed the pace of growth in the massive US services sector rose in August on the back of a rebound in employment and exports, though a measure of new orders declined.

The Institute for Supply Management said its services index jumped to 53.7 last month from 52.6 in July. That beat economists' forecasts for a 52.5 reading.

A reading above 50 indicates expansion in the sector. A separate ISM gauge of business in the manufacturing sector released on Tuesday showed contraction in August for the third straight month.

In another positive sign for the labor market, the number of planned layoffs at US companies dropped for a third straight month in August, hitting a 20-month low, according to a report from consultants Challenger, Gray & Christmas Inc.

Worries about the so-called fiscal cliff in the United States - the $500 billion or so in tax hikes and government spending cuts that will kick in at the start of the year absent congressional action - and Europe's debt crisis have acted as a brake on business hiring and investment, analysts say.