(Reuters) - U.S. job growth increased by the most in 10 months in November as former striking workers returned to General Motors' GM.N payrolls and the healthcare industry stepped up hiring, confirming that the economy remained on a moderate expansion path despite a prolonged manufacturing slump.

FILE PHOTO: Work crews construct a new hotel complex on oceanfront property in Encinitas, California, U.S., November 26, 2019. REUTERS/Mike Blake

MARKET REACTION:

STOCKS: S&P e-mini futures ESv1 extend slight gain, last up 0.67%, pointing to higher open

BONDS: Treasury yields rise; 2-year US2YT=RR at 1.6391% and 10-year US10YT=RR at 1.8589%

FOREX: The dollar index .DXY extends slight gain, last up 0.27%

COMMENTS:

ANDRE BAKHOS, MANAGING DIRECTOR, NEW VINES CAPITAL LLC, BERNARDSVILLE, NEW JERSEY

“Basically the market is very positive on this news because what it does is, it confirms a strong economy even though we have seen a little weakness come in. Companies are still confident that the economy is strong, companies are still hiring. The unemployment rate came down as well. The overall picture basically comes down to this number is going to be positively taken by Wall Street as it continues to support the argument of a strong economy and a strong workforce. This is going to throw a wrench into the argument that the economy is slowing down. Companies don’t hire if the economy is slowing down, companies go the other way.”

“It’s telling that the policies and stances that the Trump administration has taken are manifesting in a strong economy and a strong jobs market.”

“China trade talks have consistently been all over the place. One day we hear this, the next day we hear that. I still think that in the end something will get done. We are going to know more by Dec. 15. Until then it’ll go back and forth depending on what the tweet says or what Trump says or what China says. So, I don’t think anything is settled, I just think it’s just a wild card that could create volatility and we’ll have to see what happens.”

DOUG DUNCAN, CHIEF ECONOMIST, FANNIE MAE, WASHINGTON D.C.

“From the Fed’s perspective, this is steady as she goes. From a monetary policy perspective, it is a report that suggests no real weakness in the employment space. Markets should be pretty happy that growth will continue.”

“It doesn’t suggest that there is going to be any dramatic uptrend (in construction.) But it also doesn’t suggest a significant weakening from the path we’ve been on... The issues on trade are certainly putting on hold investment plans in that space until people know how the terms of trade are going to be set. So if you’re thinking about construction of warehouse space or facilities related to the moving of goods in the trade space, it’s pretty reasonable that you wouldn’t see any growth in that space.”

MICHAEL ARONE, CHIEF INVESTMENT STRATEGIST, STATE STREET GLOBAL ADVISORS, BOSTON

“The report itself is really strong. The top-line number came in well above the average jobs gains we’ve seen all year, revisions were higher, unemployment rate ticked down, average hourly earnings ticked up and then areas that were previously weak or struggling like manufacturing and retail trade rebounded a bit and other job gains were pretty broad. Health care continues to be a strength of the jobs market.

“Overall this was a very solid report and should put those fears of recession firmly in the rear view.

“Not only the jobs data, but most economic data will continue to take a back seat to the U.S.-China trade negotiations and that the Dec. 15th date continues to loom over markets in terms of whether we’ll make some significant announcement or progress in terms of delaying those tariffs that are scheduled into effect on Dec. 15. That will continue to be the driver of market action for most of this month.”

SAMEER SAMANA, SENIOR GLOBAL MARKET STRATEGIST, WELLS FARGO INVESTMENT INSTITUTE, ST. LOUIS

“The U.S. consumer has been driving not just the U.S. economy but the global economy. The U.S. is one of the largest consumers in the world. The fact the U.S. consumer continues to chug away continues to be something that’s holding up U.S. growth and has been a stabilizer in the global outlook.”

“It’s a great number. There’s not much in here to look at and say the labor market is slowing meaningfully.”

“One thing that’s been really interesting is that the participation rate has been grinding higher. Not only do you have an improving labor market but you have more people coming in off the sidelines. The 12 month average for the participation rate is 63%. The current number is 63.2 and last time it was 63.3. Now those might not sound like big improvements but when you’re talking about an economy as big as the U.S. every little bit helps.”

“It was a really good number and a lot of our forecast for 2020 is built off the back off the U.S. consumer continuing to spend. This jobs report reinforces that outlook and shows investors they should continue to make sure they’re maintaining their equity allocations while not leaning out over their skis and that they should fight urge to get too defensive too early.”

“You’ve stocks up and yields up and the dollar. At some point yields and the dollar will start to become a headwind for equities. We’re not there yet.”

JIM VOGEL, INTEREST RATE STRATEGIST, FHN FINANCIAL, MEMPHIS

“Certainly these numbers are way out of bounds compared with anyone’s expectations. We knew the autoworkers would be returning, but health & education were big numbers as well. You’ve got an outlier number and the market reacts the way it was supposed to based on the labor market. But it’s a labor market situation again other reports, and other economic reports aren’t quite as stellar. In our view this opens a buying opportunity that could extend into next week. Longer-term these yields will prove attractive.”

TOM PORCELLI, CHIEF US ECONOMIST, RBC CAPITAL MARKETS, NEW YORK

“I think they (the Fed) are going to feel good about this narrative that they’ve been pushing, where things are looking good. That’s sort of their new narrative and I think this fits very snugly into this narrative. I think they are feeling really good right now that they’ve decided to put this thing on pause.”

JJ KINAHAN, CHIEF MARKET STRATEGIST, TD AMERITRADE, CHICAGO

“Kind of a blowout report, to put the 3-month average back above 200,000 is pretty amazing, with some of the revisions. The one part of it I don’t get excited about, the number two area was related to automobiles. Well, that is just the GM folks going back to work. But it is interesting to see manufacturing plus 54,000. I guess some of that is GM, but overall I would still think that is a positive. Healthcare and business-to-business, as usual, they come to play every single month. The other good trend we are seeing that we saw the last couple of months and continuing this month is the transportation and warehousing. That just relates to the health of the consumer and these goods being shipped. It is nice to see the continued confirmation of how healthy the consumer is.

“Rates are higher on the day, with this. Traditionally, this seems to be a more normalized reaction to this. It is so normal, it’s odd.”