A report released by payroll processor ADP on Wednesday showed private sector employment in the U.S. increased by slightly more than expected in the month of November.
ADP said private sector employment shot up by 534,000 jobs in November after surging by a revised 570,000 jobs in October.
Economists had expected private sector employment to jump by about 525,000 jobs compared to the addition of 571,000 jobs originally reported for the previous month.
"November's job gains bring the three month average to 543,000 monthly jobs added, a modest uptick from the job pace earlier this year," said ADP chief economist Nela Richardson. "Job gains have eclipsed 15 million since the recovery began, though 5 million jobs short of pre-pandemic levels."
"Service providers, which are more vulnerable to the pandemic, have dominated job gains this year," she added. "It's too early to tell if the Omicron variant could potentially slow the jobs recovery in coming months."
The report showed employment in the service-providing sector spiked by 424,000 jobs in November, reflecting notable job growth in leisure and hospitality and professional/businesses services industries.
Employment in the goods-producing sector also jumped by 110,000 jobs, as employment in the construction and manufacturing industries rose by 52,000 jobs and 50,000 jobs, respectively.
ADP said employment at large businesses surged by 277,000 jobs, while midsized businesses added 142,000 jobs and employment at small businesses increased by 115,000 jobs.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said the strength in the labor market supports Federal Reserve Chair Jerome Powell's comments suggesting the central bank might need to end its asset purchase program a few months earlier than previously planned.
"That said, we do expect payroll growth to ease back soon as, regardless of what happens with the Omicron coronavirus variant, rising Delta infection rates in the Northeast and Midwest begin to weigh on demand a little," Ashworth added.
On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes both public and private sector jobs.
Employment is expected to jump by 550,000 jobs in November after surging by 531,000 jobs in October, while the unemployment rate is expected to edge down to 4.5 percent from 4.6 percent.