The private sector added more jobs in October than most analysts expected on gains in the service sector, according to the ADP National Employment Report.
Automatic Data Processing Inc. said nonfarm private payrolls increased by 110,000 in October on a seasonally adjusted basis. That's down from 116,000 for September, which was revised up from 91,000.
The payroll giant conducts the monthly survey, which excludes federal jobs, in conjunction with Macroeconomic Advisers.
Service sector jobs rose by 114,000 in October down from a gain of 122,000 the prior month, according to ADP. Meanwhile employment in the goods-producing sector fell by 4,000 last month and manufacturing employment decreased by 8,000.
Gary Butler, chief executive of ADP, said October's gains came exclusively in service sector jobs with growth in professional and business services and "manufacturers' uncertainty around investment and hiring."
"The recent trend in private employment is probably below a pace consistent with a stable unemployment rate and reflects the sluggish pace of GDP growth exhibited earlier this year," according to Joel Prakken, chairman of Macroeconomic Advisers,.
Prakken said employment at companies with between 50 and 499 employees rose 53,000 while large companies lost 1,000 jobs in October.
Analysts surveyed by Econoday expected 100,000 new private-sector jobs in October with a range of estimates from 38,000 to 139,000.
Paul Ashworth, chief U.S. economist at Capital Economics, said "big manufacturing exporters have employment on hold, probably because of the deterioration in economic growth in Europe and Asia, but smaller domestically focused services firms are still expanding."
"So the good news is that employment growth appears stable, but the bad news is that gains of 100,000 or slightly less a month won't be sufficient to reduce the unemployment rate or generate a pick up in income growth," according to Ashworth.
On Friday, the Labor Department reports October nonfarm payroll data.
TrimTabs Investment Research estimates the economy added 160,000 jobs in October, more than double the 64,000 in September.
Madeline Schnapp, director of macroeconomic research at the Sausalito, Calif., firm, said the good news is the increase and "the bad news is that the improvement is unlikely to persist thanks to the raging debt crisis in Europe."
Also Wednesday, Challenger, Gray & Christmas said planned job cuts by U.S. employers declined 63% to 42,759 in October from 115,730 a month prior, which was the highest level since April 2009. Through the 10 months of 2011, American employers have announced nearly 522,000 job cuts, which is 16% more than the same period a year earlier but well below the 1.2 million through the first 10 months of 2009.
Write to Jason Philyaw.