Employment in the U.S. private sector increased by much more than anticipated in the month of July, according to a report released by payroll processor Automatic Data Processing, Inc. on Wednesday. The report showed that the private sector added 163,000 jobs in July following a downwardly revised increase of 172,000 jobs in June. Economists had expected an increase of about 120,000 jobs compared to the increase of 176,000 jobs originally reported for the previous month. Carlos A. Rodriguez, president and chief executive officer of ADP, said, "This increase marks two-and-half years of positive job growth." "According to our data, businesses across the country have restored nearly 4 million jobs during this period with an average of 131,000 new positions a month," he added. "Although encouraging, we'd like to see continued growth but at more robust and consistent levels." The stronger than expected private sector job growth in July was largely due to the increase of 148,000 jobs in the service-providing sector, which added 151,000 jobs in June. Employment in the goods-producing sector increased by a more modest 15,000 jobs in July, with manufacturing employment edging up by 6,000 jobs. The report also showed that employment at small and medium-size businesses rose by 73,000 jobs and 67,000 jobs, respectively, while employment at large businesses increased by 23,000 jobs. Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, while we should take note of this better than expected figure, its monthly correlation to the government payroll data is very sketchy." "Over time and with a variety of revisions the two methodologies should converge but in the mean time the markets will focus on Friday's number," he added. Friday morning, the Labor Department is scheduled to release its monthly report on the employment situation, which includes both private and public sectors jobs. Economists currently expect the Labor Department report to show that U.S. employment rose by about 100,000 jobs in July following a weaker than expected increase of 80,000 jobs in June. The unemployment rate is expected to remain unchanged at 8.2 percent.