The ADP national employment report shows an increase of 183,000 in private payrolls in January after a substantial upward revision to 176,000 jobs in December. The January rise is well above the consensus of up153,000 in the Econoday survey of forecasters. While goods-producers' payrolls are down 6,000 in January, service-providers added 190,000 new jobs.

Declining payrolls for goods-producers is entirely due to a drop of 13,000 in manufacturing where construction gains 3,000 jobs and natural resources is up 4,000.

Payroll growth at service-providers in January reflects particular strength from an increase of 56,000 in trade, transportation, and utilities, and 54,000 in leisure and hospitality. The two are 58 percent of all added jobs in January.

Firms of all sizes added jobs in January. Small establishments (1-40 employees) see 39,000 new jobs, medium establishments (50-499 employees) see 92,000, and large establishments (500+) see 69,000.

The ADP pay insights data point to continued moderate increases compensation. The median annual increase for job-stayers in January is up 4.7 percent. For job-changers, the median annual increase is 6.8 percent. Although the labor market has cooled, businesses must still compete to attract and retain workers with the right skills and/or experience.

The consensus looks for an increase of 153,000 in private payrolls, up from 122,000 a month earlier.

The national employment report from Automated Data Processing Inc. is computed from ADP payroll data and offers advance indications on the U.S. workforce. ADP's data cover more than 500,000 companies totaling more than 25 million employees. The report is produced by ADP Research Institute in collaboration with Stanford Digital Economy Lab.

Market players have become accustomed to the excitement on employment Friday and realize the rich detail of the monthly employment situation can help set the tone for the entire month. While economists have improved their nonfarm payroll forecasts over the years, it is not unusual to see surprises on employment Friday. To that end, the ADP's national employment report can help improve the payroll forecast by providing information in advance of the employment report.

The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.

By tracking jobs, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.