By Xavier Fontdegloria

Private-sector job growth in the U.S. gained pace in December, signaling that the labor market continued to strengthen before the spread of the Covid-19 Omicron variant.

Private payrolls increased by 807,000 jobs in December, the ADP National Employment Report showed Wednesday, well above the 375,000 gain forecast from economists polled by The Wall Street Journal and the highest figure since May.

The number of jobs created in November was revised to 505,000 from 534,000 initially estimated.

"December's job market strengthened as the fallout from the Delta variant faded and Omicron's impact had yet to be seen," said Nela Richardson, chief economist at ADP. Job gains were broad-based, with gains among both goods producers and services providers, she said.

Large businesses, those of at least 500 workers, created 389,000 jobs in December, the data showed. Medium-sized businesses, between 50 and 499 employees, added 214,000 jobs; and small businesses, with a maximum of 49 employees, registered 204,000 payroll gains.

By sector, services providers created 669,000 jobs, with leisure and hospitality adding 246,000 payrolls.

Jobs in the goods-producing sector were up by 138,000; 74,000 of them in manufacturing, 62,000 in construction, and 2,000 in natural resources and mining.

Job gains topped the six million mark in 2021, but despite the gain private sector payrolls are still nearly four million jobs short of pre-pandemic levels, Ms. Richardson said.

The report, carried out by the ADP Research Institute along with Moody's Analytics, is based on data through the 12th of the month.

The U.S. Department of Labor is expected to release its employment report for December, which covers the same period as the ADP National Employment Report, on Friday. Economists polled by The Wall Street Journal are expecting it to show nonfarm payrolls up by 422,000, and the unemployment rate down to 4.1%. The ADP series can diverge considerably from the Labor Department's data.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

(END) Dow Jones Newswires

01-05-22 0847ET