U.S. service sector growth, hiring improves in January

(Reuters) - Growth picked up in the U.S. service sector in January, with steady strength in private-sector hiring, suggesting the winter weather that socked the country over the last several weeks had a limited effect on the economy. U.S. private employers added 175,000 jobs in January, the smallest gain since August, according to payrolls processor ADP, in part due to the weather. The overall pace of job growth wasn't far off ADP's recent trend, and hiring indexes in both the Institute for Supply Management survey and a separate service-sector survey from Markit kept investors optimistic the U.S. Labor Department's nonfarm payrolls report on Friday will show January hiring rebounded after a weak December, which saw a payroll gain of just 74,000. "ADP offset some of the concern from the weak December payrolls report and showed that the labor market is pretty much where it was most of last year," said Omair Sharif, senior U.S. economist at RBS Americas in Stamford, Connecticut.

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