NEW YORK ( TheStreet) -- Companies added more jobs than expected in February, setting up expectations for a strong nonfarm payrolls report on Friday.

The ADP National Employment Report said early Wednesday that private sector employment increased by 217,000 in February on a seasonally adjusted basis. The estimated change of employment from December 2010 to January 2011 was revised up to 189,000 from the previously reported increase of 187,000. Economists were expecting a private sector employment addition of 165,000 according to consensus estimates from Briefing.com.

The average gain since December in private sector jobs stands at 217,000, higher than the average gain in the prior six months of 63,000, suggesting a strong recovery in the job market. However, the jobs report from the Bureau of Labor Statistics has shown a significantly more modest addition in payrolls in recent months, raising doubts about the pace of job growth.

Employment in the service-providing sector rose by 202,000 in February, marking 13 consecutive months of employment gains. Employment in the goods-producing sector rose 15,000, the fourth consecutive monthly gain.

Manufacturing employment rose 20,000, the fifth consecutive monthly gain. The ISM report on manufacturing on Tuesday pointed yet again to strong trends in employment.

Employment among small-size businesses, defined as those with fewer than 50 workers, increased by 100,000, a sign that business confidence is improving among small businesses.

Construction remains the weak link in the jobs market. In February, construction employment dropped 9,000. The total decline in construction employment since its peak in January 2007 is 2.1 million. Employment in the financial services sector remained flat in February.

Futures were down in premarket trading. The SPDR Dow Jones Industrial Average ( DIA) was lower by 0.3%, the SPDR S&P 500 ( SPY) was off by 0.08% and the PowerShares QQQ ( QQQQ) was falling 0.3%.

--Written by Shanthi Bharatwaj in New York

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