WASHINGTON - April 1, 2010 – Private sector employers shed 23,000 jobs in March, surprising economists who expected job growth last month and raising doubts that Friday's government report on March unemployment will be as positive as hoped.

Forecasters expected the private sector to add 40,000 jobs last month. But the ADP Employer Services report, released on Wednesday, said otherwise, underlining the shaky nature of the overall economy.

Big losers in the ADP report were the construction industry, which lost 43,000 jobs in March, and factories, which shed 9,000 jobs. On the plus side, service providers added 28,000 workers last month.

The official February U.S. unemployment rate was 9.7%, down from its recent high of 10.1% in October. Forecasters expect to see no change in the rate for March. Most economists say unemployment will remain well above 9% for the remainder of 2010.

The ADP number does not always correlate to the government's unemployment figures. However, because ADP counts only private-sector employment, not government jobs, it may show a clearer picture of the state of U.S. joblessness. Friday's government report will be inflated by as many as 100,000 new temporary jobs - workers hired for this year's census. Throughout the course of this year, the Commerce Department expects to hire more than 600,000 census workers, whose jobs will end when the survey does.

"While many are waiting for Friday's payroll figure to tell them the state of the U.S. labor market, I'm going to rely on today's ADP report as a better gauge," wrote Miller Tabak equity strategist Peter Boockvar. "That is because it is private-sector based and thus won't be distorted by the likely 100,000-plus addition of government census workers." Additionally, Boockvar said, the ADP report better accounts for the employment impact of the big February snowstorms.