Paul Davidson

USA TODAY

The labor market ended 2013 on a roll, with businesses continuing a several-month streak of solid payroll gains by adding 238,000 jobs in December, payroll processor ADP said Wednesday.

Economists expected ADP to report 200,000 additional private-sector jobs, according to a consensus forecast. The Labor Department's more closely watched survey of businesses and federal, state and local governments, due Friday, is expected to show 195,000 jobs were added last month.

Both employment reports capture similar trends but ADP has had mixed success in forecasting the Labor tally. The two reports sometimes diverge more sharply in December because of holiday absences and the tendency of employers to purge their payrolls of employees who have left the company, says Jim O'Sullivan, chief U.S. economist of High Frequency Economics.

Last month, small businesses added 108,000 jobs; large companies, 71,000, and midsize ones, 59.000.

Professional and business services led payroll gains with 53,000. Construction companies, which are benefiting from the housing recovery, added a surprisingly strong 48,000. And trade, transportation and utilities added 47,000. Manufacturers added 19,000 jobs.

"Job gains are broad-based across industries, most notably in construction and manufacturing," said Mark Zandi, chief economist of Moody's Analytics, which helps ADP compile the report. "It appears that businesses are growing more confident and increasing their hiring."

The economy lately seems to have shifted into a higher gear, with the labor market, manufacturing, retail sales and housing performing better than anticipated. Employers added an average 204,000 jobs a month from August through November, according to Labor's survey.

The Census Bureau said this week that the U.S. trade deficit fell to a four-year low in November, a development that likely boosted fourth-quarter economic growth by as much as a percentage point to more than 3% annualized.

The improving economy prompted the Federal Reserve to begin to pare back its monthly bond purchases, which are aimed at holding down interest rates and spurring economic and job growth.