The private sector cut 22,000 jobs in January, according to a report by ADP Macroeconomic Advisers released Wednesday, the smallest loss in the private sector in nearly two years.
ADP said the service sector added jobs in January at a pace of 38,000 positions, but the sector's expansion was not enough to offset a 60,000-job decline in the goods-producing sector.
The 22,000-job decline was mostly in line with economists' forecasts, who were looking for the ADP report to come in with a loss of 30,000 jobs.
The ADP report tries to forecast the Labor Department's jobs report that comes out on Friday. ADP is not considered an incredibly accurate indicator, and generally tends to undershoot the Labor Department report.
Abiel Reinhart, an economist with JPMorgan Chase, said in an e-mail that ADP tends to underreport jobs compared to the Labor Department's report by about 60,000 positions.
Economists, on average, are looking for Friday's jobs report to show that the nation created a modest 13,000 jobs in January and the unemployment rate remained steady at 10.0%.
ADP also revised upward its December report, from a previous job loss figure of 84,000 to a loss of 61,000.
Ian Shepherdson with High Frequency Economics said that the upward revision makes a positive reading on Friday's jobs report "a bit more likely" and said it's "just a matter of time" before the economy begins creating jobs on a monthly basis.
The ADP National Employment Report was created by Automatic Data Processing (ADP: 40.6492, -0.5308, -1.29%), in partnership with Macroeconomic Advisers.
By Ken Sweet FOXBusiness