U.S. private employers hired more workers than expected in February and data for the prior month was revised sharply higher as the labor market recovery gathers steam.

Private payrolls increased by 475,000 jobs last month, the ADP National Employment Report showed on Wednesday.

January Number Revised Up to 509k

Data for January was revised higher to show 509,000 jobs were added instead of 301,000 lost as initially reported. Economists polled by Reuters had forecast private payrolls would increase by 388,000 jobs.

The ADP report is jointly developed with Moody's Analytics and was published ahead of the Labor Department's more comprehensive and closely watched employment report for February on Friday. It has, however, a poor record predicting the private payrolls count in the department's Bureau of Labor Statistics employment report because of methodology differences.

While the initial ADP estimate showed private payrolls fell for the first time in a year in January, the BLS reported that the private sector hired 444,000 workers, with large upward revisions to employment gains in November and December.

Indications are that companies maintained a strong pace of hiring in February. Data from Homebase, a payroll scheduling and tracking company, showed substantial increases in the number of employees on the job as well as hours worked in mid-February.

Omicron Impact Over

According to UKG's workforce activity report, workforce activity saw its largest monthly increase in shift work in February since the spring of 2020. The workforce management software company said the surge meant that the impact of the 0micron variant of COVID-19 on hourly shift work was over.

That aligns with expectations for another month of solid employment gains in February. Nonfarm payrolls likely increased by 400,000 jobs after rising 467,000 in January, according to a Reuters survey of economists. Private payrolls are forecast to have increased by 378,000 jobs in February.