U.S. private employers added more jobs than expected in January, the 12th consecutive month that companies took on staff, adding to hopes that the weak American labor market is slowly improving.

The private sector added 187,000 jobs in January, compared with a downwardly revised 247,000 jobs in December, a report by payrolls processor ADP Employer Services showed on Wednesday.

The ADP figures come ahead of the government's more comprehensive January labor market report on Friday, which includes both public and private sector employment.

But ADP figures for December -- both initial and revised -- turned out to be much stronger than the government report showed, adding to doubts about the reliability of ADP as a predictor of payrolls.

Markets showed little reaction to the data, and some analysts said investors could be wary of ADP after December's numbers.

People are discounting it because of (December's) shocker and a couple of days later, it proved to be wrong, said John Canally, investment strategist at LPL Financial in Boston.

Still, he said, it's 12 months in a row that ADP showed job gains. That's the longest stretch since 2006 to 2007. Companies are cut to the bone. You are not going to see any more layoffs.

The January ADP figure was above economists' expectations for gains of 145,000 in a Reuters poll.

Even though most indicators lately have suggested the U.S. economy is picking up steam, job creation has been slow since the end of the recession in June 2009.

Analysts have closely watched data on private payrolls, which tend to show the bulk of new job gains.

In the markets, investors were more focused on the civil unrest in Egypt. U.S. stocks opened slightly lower, pulling back after Tuesday's strong advance and Egypt President Hosni Mubarak's announcement of his decision to step down at the end of his term. But they later climbed back into positive territory.

U.S. Treasury debt prices were up slightly, while the euro was down against the dollar..

Friday's Labor Department report is expected to show a rise in overall nonfarm payrolls of 145,000 in January, based on a Reuters poll of analysts, and a rise in private payrolls of 155,000.

Analysts have said severe snow storms that hit the country during the survey period could result in a much lower figure.

Macroeconomic Advisers LLC Chairman Joel Prakken said the ADP data was not significantly affected by the weather and he did not see an impact on Friday's payrolls data either.

Macroeconomic Advisers develops the report with ADP.

When I look at these two months together (December and January) ... I see a clear pattern of strengthening and acceleration here, that I think is very encouraging, Prakken told reporters.

A separate report on Wednesday showed the number of planned layoffs at U.S. firms in January rose 20 percent from December, to 38,519, but the tally was still the lowest for a January since at least 1993.

Noting that January was typically a month of large job cuts, global outplacement company Challenger, Gray & Christmas said the slowdown in job cuts that began in the latter half of 2010 appeared to be continuing.

But in a sign that employers are reluctant to increase full-time hiring, Manpower Inc, which provides temporary services, posted results that beat estimates, saying demand was exceptional in Europe and had increased for technology workers.

(Additional reporting by Richard Leong and Kristina Cooke in New York; Editing by Dan Grebler)

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