Jobs picture shows some positive signs

NEW YORK (CNNMoney) -- In a sign of continued improvement in the job market, private sector employers added over 200,000 positions in March and the number of planned job cuts fell, according to two reports released Wednesday.

Payroll processing company ADP said private sector payrolls grew by 201,000 in March, after a revised 208,000 increase in February. Economists were expecting a gain of 210,000 private sector jobs, according to consensus estimates from Briefing.com.

ADP said the average monthly increase in employment over the last four months has been 211,000, which is "consistent with a gradual if uneven decline in the unemployment rate."

Joel Prakken, an ADP spokesman who is also chairman of Macroeconomic Advisers, said he expects private sector payrolls to grow by about 200,000 jobs a month for the rest of 2011, with some months coming in even higher. He sees the unemployment rate to falling to near 8.25% by the end of the year.

"This month's ADP National Employment Report removes any remaining doubt that nonfarm private employment accelerated heading into 2011," he said.

Prakken noted that the ADP report showed "broad gains" across all sectors of the economy, including strong growth in manufacturing and improvement in the services sector. In addition, companies of all sizes added jobs in the March, he said.

The ADP report adds "to the evidence that conditions in the labor markets are finally beginning to show some meaningful signs of improvement," said Paul Ashworth, chief U.S. economist at Capital Economics.

While the improvement in private sector hiring is encouraging, Ashworth points out that it will take a long time for the job market to fully recover from the declines seen during the recession.

Even with job growth in the range of 200,000 a month, it will take four years for the unemployment rate to return to pre-recession levels, according to Ashworth.

Meanwhile, the number of jobs cut fell 18% to 41,528 from February's 50,702, according to outplacement consulting firm Challenger, Gray & Christmas. Year over year, job cuts dropped 39% from 67,611 in March 2010.

"The good news is that other areas of the economy appear to have stabilized in terms of downsizing activity. The sectors that had the heaviest job losses at this point a year ago have seen significantly fewer layoffs," Rick Cobb, executive vice president of Challenger, Gray & Christmas, said in a statement.

The March numbers mean that 130,749 job cuts were announced in the first three months of 2011, the lowest first-quarter total since 1995.

But for workers in public sector jobs, it was not a good month. Government positions dominated planned job cuts, accounting for 19,099, or 46% of all announced reductions.

"It is difficult to be optimistic about the outlook for government workers," Cobb said. "Most cities and states have only just begun to address their massive budget deficits, and we have yet to see how budget cutbacks are going to impact workers at the federal level."

The ADP and Challenger reports typically set the tone for the government's highly anticipated monthly employment data, which is due Friday.

Ahead of the jobs report, economists surveyed by CNNMoney are predicting the economy added 180,000 jobs in March, while the unemployment rate held steady at 8.9%.