INSTANT VIEW 4-US Jobs growth slows, unemployment up in December

NEW YORK (Reuters) - U.S. employers added a scant 18,000 jobs in December and the national unemployment rate kicked up to five percent, its highest in more than two years, according to a government report on Friday that underlined the economy's rapidly slowing momentum.

KEY POINTS: * The unemployment rate rose to 5 percent from 4.7 percent. * Economists polled by Reuters had a median expectation for 70,000 jobs to be created.

COMMENTS:

IAN SHEPHERDSON, CHIEF U.S. ECONOMIST, HIGH FREQUENCY

ECONOMICS, VALHALLA, NEW YORK:

"Take out the 44,000 in private education and health and core private business sector payrolls dropped 57,000. The weakness was concentrated in construction (-49,000), manufacturing (-31,000) and retailing (-24,000), offset partly by a 43,000 gain in professional & business services. Overall, very soft, and the rise in claims and drop in help wanted implies further declines ahead. The rise in unemployment is partly a rebound from the fluky November household survey numbers but the trend is clear. The Fed has to respond."

ALAN LANCZ, PRESIDENT, ALAN B. LANCZ & ASSOCIATES INC.,

TOLEDO, OHIO:

"This number is definitely disappointing. It goes to show the ripple effect from subprime and (housing). That's hitting other industries besides financials. The ripple effect took a while to take hold. It's just one of the reasons we're cautious.

"I just don't see market hitting new highs. What this confirms is that you're going to have a drop in interest rates at least through the first half of 2008. The big question now is will the cuts be enough to spur the economy or are we on the road toward a recession?"

FIRAS ASKARI, HEAD CURRENCY TRADER, BMO CAPITAL MARKETS,

TORONTO:

"A very disappointing number, it increases the chances of the Federal Reserve potentially being more aggressive in their easing. Both the headline number and the unemployment ticking up to 5 percent, there is nothing positive in this number. If you look at the average hourly earnings, they are ticking up slightly. It is putting the Fed in a very difficult position. There are inflationary pressures creeping into the economy, meanwhile the real economy is starting to show signs of deterioration.

The dollar is falling against other currencies as this implies a more aggressive Fed in easing. The currency is taking it on the chin. The U.S. dollar is going to be posting some losses here. My gut still says the Fed will only go 25 (basis points), because they are going to try and balance the inflationary pressures versus the weakening economy, but at the end of the day it would have to come to whether they decide about propping up a weaker economy and preventing recession versus inflation. I think they are more likely to be more concerned about a recession than inflation.

BORIS SCHLOSSBERG, SENIOR CURRENCY STRATEGIST, DAILYFX.COM,

NEW YORK: