Economy

New US private sector jobs fall short

ADP August payrolls up 190,000
VIDEO3:4303:43
ADP August payrolls up 190,000

Private-sector job creation held steady last month, but was below market expectations, according to an ADP report Wednesday that paints an uninspiring picture.

Companies added 190,000 jobs to close out the summer, a number that was better than July's downward-revised 177,000 and below the expected 201,000 new positions.

Professional and business services led the way with 29,000 new jobs, while trade, transportation and utilities added 28,000 and construction grew by 17,000. Overall, services were responsible for 173,000 of the total, with goods-producing contributing just 17,000.

The report tees the market up for Friday's closely watched nonfarm payrolls report from the Bureau of Labor Statistics.

Get the market reaction here.

Economists expect to see growth of 220,000 jobs for August. The payrolls number is a key indicator for the Federal Reserve, which is expected to raise rates before the end of the year though the timing is uncertain. A weak jobs report could give the U.S. central bank reason not to hike at its September Open Market Committee meeting.

Despite the miss relative to market expectations, Moody's senior economist Mark Zandi told CNBC the ADP report was "rock-solid." However, he cautioned that Friday's report could be a disappointment because of seasonal adjustments in the numbers.

"It's very possible, I'd say even likely, that if the ADP number is reality, that we're going to get a BLS number that's closer to 160, 155 (thousand)," he said.

The ADP report showed job creation concentrated in small businesses with fewer than 50 employees, which added 85,000 positions. Medium-sized firms (50-499 employees) grew 66,000, while large firms added 40,000.

Read MoreUS franchise job gains below 12-month average: Report

The numbers come amid a turbulent time for markets, with major averages surrendering 6 percent or more in August and off to their worst start in September in 13 years.