U.S. private salaries rose much lower than expected in January, hinting at some cooling in the labor market.
Private employment increased by 106,000 jobs last month, ADP's National Employment report showed on Wednesday.
Data for December was revised higher to show 253,000 jobs added instead of 235,000 as previously reported. Economists polled by Reuters had forecast private employment rising by 178,000.
The ADP report, developed in conjunction with the Stanford Digital Economy Lab, was published ahead of the more comprehensive and closely watched Labor Department Bureau of Labor Statistics employment report for January on Friday. However, ADP data is considered a poor predictor of private payrolls in the BLS employment report.
According to a Reuters poll of economists, nonfarm payrolls likely rose by 185,000 jobs in January after rising by 223,000 in December.
The Fed is expected to raise its key rate by 25 basis points on Wednesday. U.S. central bank last year raised this rate by 425 basis points from near zero to a range of 4.25%-4.50%, the highest since late 2007.
