WASHINGTON (Reuters) - U.S. private payrolls increased by the most in eight months in December, pointing to sustained labor market strength though job gains last month were likely flattered by a seasonal quirk.

FILE PHOTO: People attend TechFair LA, a technology job fair, in Los Angeles, California, U.S., January 26, 2017. REUTERS/Lucy Nicholson/File Photo

The ADP National Employment Report on Wednesday showed private payrolls jumped by 202,000 jobs last month, the largest gain since April, after an upwardly revised 124,000 rise in November. Private job growth averaged 163,000 jobs per month in 2019, slowing from an average increase of 219,000 in 2018.

Economists polled by Reuters had forecast private payrolls advancing 160,000 last month following a previously reported 67,000 rise in November.

ADP private payrolls tend to surge in December because of adjustment difficulties related to the purging of employees who have permanently left company payrolls. According economists, some companies keep workers who have resigned on their payrolls until they file year-end tax documents. In contrast, in the government’s more-comprehensive employment report, workers who are no longer getting paid are dropped from the data.

“The accuracy of the ADP’s first estimate of monthly employment growth has never been anywhere near as good as we would have expected given the richness of the data source,” said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto. “Nevertheless, this latest ADP reading supports our view that employment and GDP growth held up surprisingly well in the fourth quarter, even though some of the survey evidence weakened further.”

The dollar was trading marginally higher against a basket of currencies, while U.S. Treasury yields fell. Stocks on Wall Street rose in part as Iran appeared to signal that overnight missile strikes “concluded” its retaliation for the U.S. killing of General Qassem Soleimani.

The ADP report, which is jointly developed with Moody’s Analytics, was published ahead of the Labor Department’s employment report for December scheduled for release on Friday. Even discounting the December distortions, the ADP report generally has a poor record predicting the private payrolls component of the government’s employment report because of the differences in methodology.

According to a Reuters survey of economists, nonfarm payrolls likely increased by 164,000 jobs last month after surging 266,000 in November. The unemployment rate is forecast steady near a 50-year low of 3.5%.

“The ADP data also were much weaker than the government data in November so, the strength in the December ADP report may be payback for the softness in November that may not show up in the government data,” said Daniel Silver, an economist at JPMorgan in New York.

The ADP report showed employment in the goods-producing sector increased by 29,000 jobs in December. Manufacturing payrolls fell by 7,000 jobs last month and construction added 37,000 positions, likely boosted by unseasonably mild weather. Natural resources and mining shed 1,000 jobs.

The services sector added 173,000 jobs last month, with gains concentrated in health services, professional and business services, and trade, transportation and utilities. The leisure and hospitality industry shed 21,000 jobs.