Private companies added jobs at a solid pace in November, providing a positive sign for the Federal Reserve as it prepares to raise interest rates for the first time in more than nine years.
Firms contributed a better-than-expected 217,000 positions for the month, according to the latest count from payroll processing firm ADP and Moody's Analytics. The number was ahead of Wall Street expectations for 190,000 new private sector jobs and topped the 196,000 positions created in October, a number that was revised upward from the initially reported 182,000.
The report comes as the Fed prepares to hike its key rate at the Federal Open Market Committee meeting Dec. 15-16. Wall Street has been waiting on tenterhooks for the Fed to move for the first time since it last hiked rates in mid-2006 and took its key lending rate to near-zero in late 2008.
ADP's count again showed growth strongest in the service sector and small business.
Service-producing businesses created 204,000 jobs, while goods-producing accounted for 13,000. Professional and business services led with 59,000, trade, transportation and utilities created 16,000 and construction followed with 16,000.
Businesses with fewer than 50 employees added 81,000 while those with more than 500 created 74,000.
Wednesday's ADP report comes two days ahead of the Labor Department's closely watched nonfarm payrolls report. Economists expect the report to show 195,000 jobs added, with the unemployment rate steady at 5 percent.
October's robust payrolls gain of 271,000 helped allay fears that the jobs picture was deteriorating, and if the ADP report is an indicator, that part of the economy should help boost the Fed's confidence that a rate hike is appropriate.
"Bottom line, assuming Friday's payroll number will deliver a similar result, we can lock in a rate hike in two weeks," Peter Boockvar, chief market analyst at the Lindsey Group, said in a note.
However, other aspects of the economy haven't been as strong. A report Tuesday showed manufacturing was contracting and at its lowest level since the Great Recession ended in mid-2009. Also, corporate earnings have shown consecutive quarterly declines.