Instant view: Jobless rate drops to 8.6 percent, hiring picks up

NEW YORK (Reuters) - Employment growth picked up speed in November and the jobless rate dropped to a 2-1/2 year low of 8.6 percent, further evidence the economic recovery was gaining momentum.

COMMENTS:

MARK VITNER, SENIOR ECONOMIST, WELLS FARGO SECURITIES, CHARLOTTE, NORTH CAROLINA

"The payrolls were about in line with expectations, with payrolls rising 120,000, private sector up 140,000 and a drop in government jobs of 20,000. When you look at the composition of jobs you had a big gain in retail, which you would expect going into the holiday season, and we also had a pickup in temporary help, so that the quality of jobs is not as great as you would like to see in the payrolls survey. A lot of the jobs were probably part-time positions and that is one of the reasons average hourly earnings fell."

ROBERT SINCHE, GLOBAL HEAD OF FX STRATEGY, RBS, STAMFORD, CONNECTICUT

"The bottom line is this is a good report, though not a great report. The drop in the jobless rate is consistent with something we've looked at for a long time -- the 'jobs hard to get' indicator from the Conference Board -- and that was down recently to its lowest reading since mid-2009. It might have been a slight disappointment relative to higher whisper numbers, but that was tempered by the big fall in the jobless rate. That said, we doubt it gives too much more upside push to risk appetite. We've seen a lot of improvement lately -- the U.S. data is better, the sentiment surrounding Europe has improved in the last few days on the hope a grand plan, so all that is out there in the market. This is good enough to consolidate the gains we've had. I think the euro around $1.35 is not a bad level at which to end the week."

PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK

"The really good news is that employment has grown for four months running -- in large steps.

"The payroll numbers are generally regarded as more credible than the household survey (on which the unemployment rate is based). There was a solid increase in private employment. Everything there looks steady, but clearly healthy and positive.

"A lot of the drop in the unemployment rate comes down to a decline in the size of the labor force which is quite large. Month to month changes are not very meaningful. We had three month to month increases."