Companies added 200,000 jobs in July, topping forecasts and showing signs of an improving labor market, a new report from HR firm ADP said.

Reuters reported the results Wednesday.

Economists initially expected 180,000 new jobs, 20,000 under the realized results. Additionally, June's private payrolls were revised to reflect the addition of 198,000 jobs, up from 188,000 positions in the first report.

"ADP clearly confirms the U.S. job engine is operating on all cylinders, slanting the odds toward, or at least putting the pressure on the Fed to taper sooner rather than later," said Boris Schlossberg, managing director at BK Asset Management.