Instant View: December non-farm payrolls rose by 155,000

NEW YORK Fri Jan 4, 2013 9:22am EST

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NEW YORK (Reuters) - The pace of hiring by U.S. employers eased slightly in December, pointing to a lackluster pace of economic growth that was unable to make further inroads in the country's still high unemployment rate.

Payrolls outside the farming sector grew 155,000 last month, the Labor Department said on Friday. That was in line with analysts' expectations and slightly below the level for November.

Unemployment rate held steady at 7.8 percent.

Gains in employment were distributed broadly throughout the economy, from manufacturing and construction to health care.

COMMENTS:

CRAIG DISMUKE, CHIEF ECONOMIC STRATEGIST, VINING SPARKS, MEMPHIS, TENNESSEE:

"This is a moderately growing job market. It's nothing robust. In the past three years, in the winter months, things look better. Then in the spring, they look ugly. I don't think there is a lot of momentum in job growth going into 2013, which will drive growth in retail sales.

"I think there is a new reality with consumption. Household spending has changed, but the seasonal adjustments haven't caught up yet. People have less disposable income. That's why we are seeing less spending and therefore less hiring. If we continue to see job growth in the 140,000 to 150,000 area, there will be a lot of pressure on the Fed to stop buying more bonds after the middle of the year."

RICHARD GILHOOLY, INTEREST RATES STRATEGIST, TD SECURITIES, NEW YORK:

"Private sector payrolls at 168,000 were fairly robust in December and the general view is that the recent numbers were likely depressed by fiscal cliff issues, such that improvement should be seen in coming months.

"The household survey was weaker, with only 28,000 jobs, while 192,000 people entered the labor force, pushing the unemployment rate 0.1% higher. Bonds initially traded higher on the unemployment rate and the idea that QE is pegged to at least 6.5 percent, but the market has traded back to the lows subsequently on what is generally a firm report and likely better ahead."

JOHN BRADY, MANAGING DIRECTOR AT R.J. O'BRIEN & ASSOCIATES IN CHICAGO:

"The nonfarm payroll number, keep in mind the strength in it was probably partly Sandy rebuilding, so kind of a mixed picture."

PHIL ORLANDO, CHIEF EQUITY MARKET STRATEGIST, FEDERATED INVESTORS, NEW YORK:

"It was a pretty in-line set of numbers, this is an OK report. It looks like there was a nice rebound in manufacturing. I suspect that there was a fairly sizable decline in government workers, I don't know that for a fact, but the difference between non-farm and private typically results in that.

"I like the increase in wages, I like the increase in hours worked, there was some sort of historical revision to the household survey. It was a positive revision in November, came back into a positive territory in December, that's good."

TOM PORCELLI, CHIEF U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK:

"There was a lot of excitement headed into this jobs report so this number may be disappointing. This shows the economy is chugging along, with payroll gains at about the average it has been over the past year.

"When it comes to Fed policy, this report should keep policy steady. There was talk of a scaling back of QE yesterday, but this number is a snapshot and is basically where it was when the Fed decided to do more QE last month."

TOM DI GALOMA, MANAGING DIRECTOR, NAVIGATE ADVISORS LLC, STAMFORD, CONNECTICUT:

"The job's report shows that nothing has truly changed on the economic front. The U.S. economy is just muddling through."

YELENA SHULYATYEVA, U.S. ECONOMIST, BNP PARIBAS, NEW YORK:

"It's basically in line with our GDP forecast that we don't see much of an acceleration or growth in the economy. This was December, companies were very worried about the fiscal cliff, so it's a good number that they were still hiring.

"Participation rate held steady, so it kind of looks like it was stabilizing, it was declining as we know, quite substantially, but it's looking like it's beginning to stabilize."

STOCKS: U.S. S&P 500 index futures slightly added gains

BONDS: U.S. Treasuries briefly trimmed losses

FOREX: The dollar pared gains versus the euro and yen

GRAPHIC: U.S. nonfarm payrolls: U.S. payrolls grew by 155,000 jobs in December. link.reuters.com/ram54t

(Americas Economics and Markets Desk; +1-646 223-6300)

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