Companies added 143,000 jobs in September, up from an upwardly revised 103,000 in August and above a consensus forecast of 128,000 from economists polled by Dow Jones.
Although hiring increased, the rate of wage growth continued to slow. The 12-month wage increase for those who remained in employment fell slightly to 4.7%, while for those who changed jobs, it fell to 6.6%, down 0.7 percentage points from August.
Job gains were widespread, with the leisure and hospitality sector leading at 34,000, followed by construction (26,000), education and health services (24,000), professional and business services (20,000) and other services (17,000).
The only category to post a loss was information services, down by 10,000.
Service providers accounted for 101,000 of the total, while goods producers added the balance.
From a company size standpoint, all the growth came from companies with more than 50 employees. Small firms suffered, with those with fewer than 20 employees losing 13,000 jobs.
The ADP count comes two days before the Labor Department's NFP report, which is expected to show growth of 150,000, following August's disappointing figure of 142,000, of which 118,000 came from private sector hiring.
Although the ADP report serves as a precursor to the official count, the two can sometimes differ, and can by large margins.
Federal Reserve officials are watching the jobs numbers closely as they consider the next steps for monetary policy and interest rates. In his speech on Monday, Fed Chairman Jerome Powell described the labor market as "strong" although he noted that it "has clearly slowed" over the past year.
The Fed is expected to follow a half-percentage-point interest rate cut in September with further reductions in November and December. The main question is whether the central bank will continue with the big steps or switch back to more conventional measures with a quarter-point reduction.
Futures market expectations now point to a quarter-point reduction in November followed by a half-point reduction in December. Powell noted that consecutive quarter-point moves are the more likely scenario for now, although policymakers remain sensitive to the data and will adjust their actions accordingly.
