NEW YORK - U.S. private employers cut a larger-than-expected 254,000 jobs in September, though this was less than a revised 277,000 jobs lost in August, a report by a private employment service said on Wednesday.

The August decline was originally reported at 298,000.

The median of estimates from 27 economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC, was for 210,000 private-sector jobs lost in September.

U.S. stock index futures trimmed their gains and government bonds pared their losses after the report.

It's obviously a little worse than expected, but the broader theme is that the labor market is getting less worse. It's very difficult to draw any conclusions for Friday's number because of this, said Dan Greenhaus, analyst at Miller Tabak & Co in New York, referring to the government's monthly non-farm payrolls report on Friday.

Given the uncertainty surrounding job creation, there's only so much we can read into it, but in any event, 254,000 private sector jobs lost in a month remains a very poor reading.

The ADP and Macroeconomic Advisers said its National Employment Report is designed as a proxy of the non-farm payrolls report.

The U.S. Labor Department will release its September payroll figures at 8:30 a.m. on Friday, which are more comprehensive because they include both the private and public sectors.

It is expected to show the labor market's rate of deterioration slowing, with analysts forecasting a loss of 180,000 jobs in September versus 216,000 in August.

However, the unemployment rate is expected to rise to a 26-year high of 9.8 percent from 9.7 percent the previous month.

(Reporting by Burton Frierson, Editing by Chizu Nomiyama)

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