Services again led the job creation, according to a report from ADP and Macroeconomic Advisors.

The service sector increased 164,000 in March, though the rate of job creation slowed a big from the upwardly revised 183,000 in February.

"It's got to go this way," Joel Prakken, chairman of Macroeconomic Advisors, told CNBC. "Early in the recovery you normally see a pop in manufacturing employment, but that sector no longer counts for enough of the total employment in the United States to be the eventual long-run driver of the recovery. You've got to have the recovery in service-sector jobs."

Job creation in goods-producing businesses rose 45,000 for the month, while manufacturing rose 23,000 and construction grew 13,000.

The financial sector added 8,000 positions for the month.

Small businesses —defined has having fewer than 50 employees — led the way in job creation, adding 100,000 positions. Medium-sized firms added 87,000, while large businesses with 500 or more employees lagged with 22,000 new positions added.

Financial markets reacted modestly to the report, with stock market futures edging up a bit from their lows of the morning, while Treasurys cut a bit of their price gains.

The ADP release traditionally sets the stage for the government's nonfarm payrolls report to be released Friday. Economists expect the payrolls number to grow by about 207,000 and the unemployment rate to hold steady at 8.3 percent.

ADP's numbers were a shade below consensus though unlikely to generate any substantial revisions to the nonfarm number.