The U.S. economy created jobs at the fastest pace in nine months in January and the unemployment rate dropped to a near three-year low of 8.3 percent, indicating last quarter's growth carried into early 2012.

COMMENTS:

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

I was not looking for anything like this. It's certainly supportive of the U.S. recovery and suggests that momentum is gathering pace. From a trading standpoint, it's positive for risk, but it also lowers the prospects for QE3, which is dollar positive. That's why the euro, after moving higher, is drifting back now. The possibility of QE3 probably gets pushed back to the second half of the year.

ANDREW WILKINSON, CHIEF ECONOMIC STRATEGIST, MILLER TABAK &

CO., NEW YORK

No doubt this is an extremely strong report and nobody will dislike it. The back revisions indicate the economy was stronger than expected. Overall a healthy report. Having said that, this should not change the Fed's view as it is one month's report. Certainly the Fed will welcome it but they remain worried about other areas of the economy, namely housing. This should not change its view on the economy.

MATT MCCORMICK, A MONEY MANAGER AT CINCINNATI-BASED BAHL &

GAYNOR INC, WHICH HAS $3.2 BILLION IN ASSETS

All I can say is 'wow.' You've seen optimism start to creep into the market despite the pessimism that's present in everyone's mind. We hope this is sustainable. This is the kind of number people wouldn't have believed until we saw it. Expectations were far under this.

SCOTT BROWN, CHIEF ECONOMIST, RAYMOND JAMES, ST. PETERSBURG,

FLORIDA

We are going to see stocks initially rally on this and it's going to be negative for bonds. People should take it with a grain of salt since they are January figures and subject to revisions. We also had some unusually mild weather. Still it's an encouraging report.

CAMILLA SUTTON, CHIEF CURRENCY STRATEGIST AT SCOTIA CAPITAL

Obviously a much stronger than expected release. Most of the revisions are positive as well, so well above where we expected. I think there's still caution. The important part about this release was how it factors into QE3 rather than interest rate decisions...Today's release is a very positive report and will soothe some of the deeper concerns at the Fed. I think increasingly (QE3) is being pushed to the background. I think much of it depends on the housing market.

DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON

REUTERS

January's non-farm payroll with a 243k increase was sharply above a consensus increase of 150k with positive if undramatic back month revisions. The breakdown looks positive almost across the board with manufacturing at +50k particularly impressive. Workweek data was improved, sustaining an upwardly revised December level, though hourly earnings with a 0.2% rise merely met consensus. The unemployment rate saw another significant fall, by 0.2% to 8.3%, when the consensus was for no change, with the fall due to increased employment not losses in the labor force. The broader U-6 measure of labor market slack, after three straight 0.4% plunges, saw only a modest fall of 0.1% to 15.1%, but there can be no doubts over the positive nature of this report. There is only one obvious significant caveat, an unusually mild winter restricting the number of seasonal layoffs, which are always heavy in January. Unadjusted, January payrolls still fell by 2.689 mln.

(Americas Economics and Markets Desk)

Unemployment