Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 180,000 jobs. August's private payrolls gains were revised to 159,000 from the previously reported 176,000.

"It basically says that the stimulus will continue," said Chris Gaffney, senior market strategist, EverBank Wealth Management in St. Louis, Missouri.

"The government shutdown will be a negative impact on the U.S. economy, extending the need for additional stimulus."

The U.S. Federal Reserve has been weighing pulling back on its $85-billion-per-month bond buying program but has so far kept up its purchase pace on worries that the economy, including the labor market, has not yet gathered enough momentum to stand on its own.

Complicating things further, this week the government shut down in the wake of demands by Congressional Republicans to undermine President Barack Obama's signature healthcare law in exchange for agreeing to keep the government running.

Nevertheless, the government shutdown will not show up in ADP data "to any significant degree" unless the shutdown lasts through the middle of October, Mark Zandi, chief economist of Moody's Analytics, said in a conference call with reporters. The ADP report is jointly developed with Moody's Analytics.

Policymakers are unlikely to resolve the shutdown until stock and bond investors get "unnerved," Zandi said.

But he noted that political uncertainty, including the kind of brinkmanship involved in the federal government shutdown, has had a "significant effect" on the U.S. economy in recent years, raising the unemployment rate by perhaps as much as 0.7 percentage point.

The government shutdown means the ADP report has taken on added significance this week as it looks likely to limit other labor market data for September. For example, it now seems unlikely Friday's key nonfarm payrolls report from the Labor Department will be released according to schedule.

Notable in Wednesday's report were small employers, who added 74,000 jobs, more than either medium or large businesses.

Zandi also said he was not seeing evidence that small employers are shying away from hiring because of the health care provisions of the Affordable Care Act.

(Reporting by Luciana Lopez; Additional reporting by Nick Olivari; Editing by Chizu Nomiyama)