WASHINGTON (AFP) - The US economy showed signs of green shoots in February despite blasts of wintry weather, although modest growth was patchy, data showed Wednesday ahead of a key government labor report. Job losses in the nonfarm private sector shrank to a two-year low and a measure of the massive services sector, which accounts for more than two thirds of the nations output, expanded sharply last month, private data showed. The Federal Reserve said in its Beige Book report that the ailing labor market remained soft, while economic conditions continued to expand but severe snowstorms had held back activity in several areas. The brace of data came ahead of Thursdays weekly report on initial jobless insurance claims, which hit a three-month high last week as an improving trend ran out of gas. The new jobless claims report will be the final harbinger of Fridays closely watched government monthly labor report, an important indicator of economic momentum. Analysts pointed out that severe winter weather in parts of the nation would make economic data difficult to read. The upcoming jobs report is affected by two nationwide snowstorms that surrounded the survey week one came early in the survey week itself, said Robert Brusca at FAO Economics. Though the economy posted growth in the second half of 2009, snapping a year of contraction, economists say the ailing labor market poses a major challenge to a sustainable recovery from the worst recession in decades. Most of the growth has been due to government spending and the Feds near-zero interest rates. The Labor Departments February labor data likely will offer little relief. Most analysts expect the unemployment rate ticked up to 9.8 percent from 9.7 percent in January, with nonfarm payroll losses unchanged at 20,000. A key index on the services sector showed stronger than expected growth in February, spurring speculation that the recovery is gaining traction. The Institute of Supply Management said its nonmanufacturing purchasing managers index (PMI) leapt 2.5 percentage points to 53.0 percent, beating the consensus forecast of 51.0 percent. Any number above 50 percent indicates growth. Analysts highlighted that it was the highest reading in more than two years in the important sector. The V-shaped recovery started earlier in the manufacturing sector but the service sector is now getting on board, said Brian Wesbury, chief economist at FT Advisors. Payrolls firm ADP reported that non-farm jobs in the private sector fell by 20,000 in February, matching the consensus forecast. Ryan Sweet of Moodys Economy.com said the ADP report provides a sense of how the labor market might have fared without the temporary disruptions from the storms. He noted that ADP counts actual payrolls, unlike the governments survey which is less likely to capture those people on short-term furloughs because of weather. The Feds Beige Book report gave a bleak assessment of the jobs market. Although some districts reported an uptick in hiring or a slowdown in layoffs, labor markets generally remained soft throughout the nation, which resulted in minimal wage pressures, said the report, which will be used at the Federal Open Market Committee policy-setting meeting on March 16. Brian Bethune at IHS Global Insight said the central bank reported slightly less forward economic momentum than the end of 2009. While the economy seems to be picking up some momentum, massive excess capacity in factories and in the labor markets is still the order of the day, he said, predicting the Fed will continue with its exceptionally accommodative low rate policy through most of 2010.