Growth in the U.S. services sector quickened to a four-month high in January and hiring remained robust, an industry report showed on Wednesday.
Financial data firm Markit said its services sector purchasing managers index rose to 56.7 from 55.7 in December. A reading above 50 signals expansion in economic activity.
Service sector employers added to their staffs at the start of the year though at a slightly slower pace than in December. The employment component dipped to 54.1 from 55.2.
But the pace of hiring "remains resilient as firms report the brightest business outlook for three years," said Chris Williamson, Markit's chief economist.
Combined hiring in the service sector and manufacturing suggest overall U.S. payroll growth will gravitate back toward 200,000 for the month after dipping to just 74,000 in December, Williamson added.
The January non-farm payroll report is scheduled for release on Feb. 7. A Reuters survey of economists shows an expectation for 185,000 jobs created in the month.
Last month's composite PMI, a weighted average of manufacturing and services indexes that was also reported by Markit on Wednesday, edged up to 56.2 from 56.1 in December.
Growth in the goods-producing sector lost some momentum last month as output slowed, though some economists attributed that partly to extremely cold winter weather in the U.S. Midwest and Northeast.
The employment component of the composite PMI slipped to 53.9 from 55.0 while growth in new orders, while still solid, slowed slightly.