The U.S. private sector added more jobs than forecast in July, ADP reported on Wednesday, giving the market some relief after three sluggish months as it awaits Friday's government employment report.

The New Jersey-based ADP Employer Services reported an increase of 163,000 jobs in July. Economists polled by Thomson Reuters had forecast a gain of 120,000 jobs. Also, June's total was revised down 4,000 to 172,000.

Markets look to ADP's report on private-sector payrolls to provide some guidance on the U.S. Labor Department's jobs estimate, which will be released Friday and includes information on both private- and public-sector payrolls.

Payrolls are estimated to have climbed in July by 100,000, slightly higher than the 80,000 jobs created in June, according to the median forecast of economists surveyed by Reuters. They also expect that the unemployment rate remained at 8.2 percent in July.

"This gain in private employment is strong enough to suggest that the national unemployment rate may have declined in July," said Joel Prakken, chairman of Macroeconomic Advisers, which produces ADP's report.

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