(Corrects first comment to say net revision was 70,000 jobs)

The U.S. economy created far fewer jobs that expected in December, suggesting the Federal Reserve will complete its asset buying program, but the unemployment rate dropped to its lowest in more than 1-1/2 years.

KEY POINTS: * Non-farm payrolls increased 103,000, the Labor Department said on Friday, below economists' expectations for 175,000. Private hiring rose 113,000, while government employment fell 10,000. * However, overall employment for October and November was revised to show 70,000 more job gains than previously reported. The unemployment rate fell to 9.4 percent, the lowest since May 2009, from 9.8 percent in November. * Economists raised their employment forecasts after payrolls processing company ADP Employer Services said on Wednesday private employers added 297,000 in December -- the largest gain on ADP records dating to 2000.

COMMENTS:

NIGEL GAULT, CHIEF U.S. ECONOMIST, IHS GLOBAL INSIGHT,

LEXINGTON, MASSACHUSETTS:

It's a weak number. We do have some consolation, we have a net revision of 70,000 jobs to the previous two months, so that October and November were a bit better than first announced.

We also have quite a disconnect with the household survey numbers, they show that unemployment rate dropped all the way to 9.4, which is a combination of more jobs in the household survey, but also more people dropping out of the labor force.

So, overall it is a very mixed bag, clearly very disappointing relative to expectations on that payroll number.

All around it's a disappointment, but certainly not a disaster.

(On) GDP, people are waiting day 1 to see the retail sales number, the trade deficit, etc. I don't think this will have a big effect on GDP numbers.

TODD SCHOENBERGER, MANAGING DIRECTOR, LANDCOLT TRADING LLC,

WILMINGTON, DELAWARE:

Wall Street traders and investors have become accustomed to link an improved consumer wealth effect with job creation; but, unfortunately, today's data proves that synergy is absent between them. What is painfully obvious is the main mission of both quantitative easing packages is failing. The intent of improving the wealth effect while stimulating job growth is not working, thus possibly forcing the hand of Chairman Bernanke to craft another strategy. Now that we are heading into a seasonal lull for the economy, one can only expect the coming months to be just as disappointing.

FRED DICKSON, CHIEF MARKET STRATEGIST D.A. DAVIDSON & CO IN

LAKE OSWEGO, OR:

I would expect market reaction will be negative to the news. I think it will eliminate some of the questions analysts had regarding the Fed possibly reducing the size of QEII (the second round of quantitative easing) over the next six months. The data just stands out in sharp contrast to the number seen from ADP -- it's going to raise questions regarding which data source had the appropriate seasonal adjustment factor built in. It's a confusing number.

OLIVER PURSCHE, PRESIDENT AT GARY GOLDBERG FINANCIAL SERVICES

IN SUFFERN, NEW YORK:

It looks pretty solid, especially with hourly earnings up slightly. I would put it in the good category. The fact that it missed expectations doesn't concern me since expectations jumped after Wednesday's ADP report. We're ahead of expectations if you use the expectation from before ADP, which was around 70,000. After that, it jumped up to 130,000 to 135,000. That jump is what's probably leading the volatility in futures.

The big benefit here is that the unemployment rate dropped to 9.4 percent. I would categorize this as continued positive momentum and evidence that the economy is improving and growing.

BRIAN DOLAN, CHIEF STRATEGIST, FOREX.COM, BEDMINSTER, NEW

JERSEY:

The headline miss is pretty bad, but the drop in the unemployment rate is the one reason why the dollar has not collapsed completely. Overall, a very disappointing number that reinforces the idea that we're in for a long, slow jobless recovery. The euro's been in a $1.30-1.35 range for a while and this number is not enough to break us out of that. Bernanke will speak later today and is almost certain to be dovish. The Fed simply cannot relent until they see unemployment at least below 9 percent.

MARKET REACTION: STOCKS: U.S. stock index futures turn negative after the payrolls report. BONDS: U.S. Treasury bond prices erase losses. FOREX: The dollar briefly pares gains, sending euro back above $1.30 before the greenback resumes its rise.