Wires

UPDATE 1-U.S. private sector job growth picks up in October - ADP

(Adds details from report, economist comment,)

Oct 30 (Reuters) - U.S. private employment growth showed modest acceleration in October on the strength of service-sector gains, but goods producers cut jobs for a second straight month, a report by a payrolls processor showed on Wednesday.

Employers added 125,000 jobs last month, the ADP National Employment Report showed, slightly topping the median forecast in a Reuters poll for a gain of 120,000 jobs. The increase came as private payrolls growth in September was revised down to a four-month low of 93,000 from an originally reported 135,000 increase.

The report is jointly developed with Moody's Analytics.

All of the gains in October came from the service sector, which added 138,000 jobs, while production jobs fell by 13,000 as the manufacturing, construction and natural resources sectors each lost about 4,000 positions.

"Job growth has throttled way back over the past year. The job slowdown is most pronounced at manufacturers and small companies," said Mark Zandi, chief economist at Moody's Analytics. "If hiring weakens any further, unemployment will begin to rise."

Business confidence and investment has taken a hit in recent months from President Donald Trump's prolonged trade war with China. The slowdown has been most evident in the manufacturing sector.

The softness has raised concerns at the U.S. Federal Reserve, which has responded with two interest rate cuts since July and is expected to deliver a third one later on Wednesday at the conclusion of policymakers' latest two-day meeting in Washington.

Consumer spending, however, has continued to hold up, and in a separate report the Commerce Department on Wednesday said that that was the main driver behind a 1.9% increase in third-quarter gross domestic product, down from 2.0% in the second quarter. Economists had expected growth to slow to 1.7%.

The ADP figures come ahead of the U.S. Labor Department's more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment.

Economists polled by Reuters are looking for U.S. private payroll employment to have grown by 80,000 jobs in October, down from 114,000 the month before. Total non-farm employment is expected to have increased by 85,000.

The unemployment rate is forecast to tick up to 3.6 percent from the 3.5 percent recorded a month earlier. (Reporting by Dan Burns Editing by Chizu Nomiyama)