Private sector employment increased by 246,000 jobs in January, according to the latest ADP National Employment Report.

Automatic Data Processing Inc. produces the report in collaboration with Moody's Analytics. The report is derived from ADP's actual payroll data and measures the monthly change in total nonfarm private employment on a seasonally adjusted basis.

Medium-sized businesses reported the highest increase in the month, adding 102,000 jobs. Smaller businesses added 62,000 jobs and large businesses added 83,000 jobs.

Service-providing employment increased by 201,000 jobs in January, while goods-producing employment was up by 46,000 jobs.

Employment rose by 63,000 jobs in the trade, transportation and utilities industry; 71,000 jobs in professional and business services; 47,000 jobs in education and health services; 17,000 in leisure and hospitality; and 9,000 in other services. The information industry lost 6,000 jobs in the month, while no jobs were added or lost in the financial activities sector.

Franchise employment increased by 15,500 positions in January.

"The U.S. labor market is hitting on all cylinders and we saw small and midsized businesses perform exceptionally well," Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement.

ADP revised the December 2016 total of jobs added down to 151,000 from 153,000.