Nonfarm payrolls increased by 216,000 jobs last month, the Labor Department said in its closely watched employment report on Friday. Data for November was revised lower to show payrolls rising 173,000 instead of 199,000.

The unemployment rate was unchanged at 3.7%.

MARKET REACTION:

STOCKS: U.S. stock futures deepened a loss and were off 0.47%, pointing to a weak opening on Wall Street BONDS: U.S. Treasury 10-year yield rose to 4.078% after the report. Two-year yields rose to 4.462% FOREX: The dollar index extended to a 0.48% gain

COMMENTS:

BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN"It's the season for returning gifts and the market is doing the same thing. The rally after St. Powell delivered gifts is being taken back. There is a lot of superficial strength in this labor market report. The December numbers were stronger than expected, but there were some significant back month revisions. The gains are mostly in the acyclical sectors like government and health care. The more cyclical sectors are struggling to tread water. The stronger than expected wage gains is probably the most important feature of this report. When combined with a reduction in the aggregate weekly hours worked, the total payroll cost increases were relatively small. Goods-producing industries only had payroll costs increase 0.2%. It was the service-providing information sector that had a big 3.0% gain, but that was because their hours rose 2.2%."

MICHAEL JAMES, MANAGING DIRECTOR OF EQUITY TRADING, WEDBUSH SECURITIES, LOS ANGELES"The jobs number was a little hotter than bulls were hoping to see. That's why you're seeing yields ticking higher and that's going to likely be a further headwind for equities in general."

"(Rate cut bets) are only going to get further scaled back, given this jobs report."

PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK

"The topline payrolls number was higher than expectations, but real problem is wage growth coming in hotter than expected."

"The drop in participation could explain why the unemployment rate was unchanged."

"There might be some seasonal factors attached to this, but nevertheless it's a game changer in the debate of over the Fed, in the sense that the hope of them lowering rates in the first quarter is likely to fade and the market may now begin to price (rate cuts) at a later date."

"What does it mean for the economy? Well, there's a bit of an acceleration here, so that points to the possibility of a soft landing."

(Compiled by the Global Finance & Markets Breaking News team)