Payroll company ADP said private employers added 32,000 jobs last month, topping the 30,000 jobs economists had forecast would be added.
Private employment has grown for three straight months, including the 19,000 jobs added in March and 3,000 added in February, ADP said.
High unemployment is considered one of the main stumbling blocks for a sustained recovery of the domestic economy. Adding new jobs would provide investors reassurance that the ongoing rebound remains on track.
The ADP report is seen an early indicator of the government's closely watched monthly employment report, though there are often wide variations because the ADP only accounts for private-sector jobs.
The ADP Report does not include any federal hiring in April for the 2010 Census, the company said. "For this reason it is reasonable to expect that Friday’s figure for nonfarm total employment reported by the BLS will be stronger than today’s estimate for nonfarm private employment in the ADP Report," it said.
The Labor Department is expected to report on Friday that the unemployment rate was unchanged at 9.7 percent last month as employers added 200,000 jobs.
Service Sector Expansion Continues
Meanwhile, a private trade group said Wednesday that the service sector expanded in April, but at a slower pace than economists had expected.
The Institute for Supply Management, a trade group of purchasing executives, said its service sector index read 55.4 in April, the same level as in March. It's the fourth straight month of growth.
Economists polled by Thomson Reuters had expected a stronger reading of 56. A level above 50 indicates growth.
The service sector accounts for 80 percent of U.S. jobs in areas such as health care, retail and financial services. It has lagged behind the smaller manufacturing sector in the recovery as consumers curtailed their spending.
While employment data released from other market trackers Wednesday pointed to a brightening jobs picture, ISM's jobs measure contracted for the 28th straight month in April.
ISM said its measure of business activity rose to 60.3, the strongest pace of expansion since April 2006, and a measure of new orders remained high. New orders signal future business.
Fourteen of the 18 industries ISM surveys said they grew in April, led by arts and entertainment, real estate, the information sector, agriculture, and management and back-office support services companies.
The four industries that shrank were utilities, education, health care and social services, and professional and scientific services.
The service sector accounts for 80 percent of U.S. jobs in areas such as health care, retail and financial services. It has lagged the much smaller manufacturing sector in recovering from the recession.
ISM said its jobs measure contracted for the 28th straight month.
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