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Hot job gains spark talk of earlier Fed move

Recruiters wait at a booth at a military veterans' job fair in Carson, Calif.
Lucy Nicholson | Reuters

November's surprisingly strong job growth and wage gains sparked talk of an earlier Fed rate hike, but that's not likely without several months of solid improvement, strategists say.

Nonfarm payrolls increased by a stunning 321,000 in November, the best jobs gain since January 2012, and average hourly earnings rose by 9 cents, for a 2.1 percent year-over-year rise. Stock futures sold off on the headlines and bond yields shot higher, on speculation the Fed would come off the sidelines with an earlier rate hike.

Read MoreStrong jobs report gives Fed green light

Fed fund futures immediately moved up the first rate rise to June from September. Market expectations had been trailing Fed forecasts, including a comment earlier this week from New York Fed President William Dudley that he expected the first rate hike midyear.

"The market has effectively accelerated its expectation for a Fed rate hike by a full quarter simply on the basis of this jobs number," said Adrian Miller, director of fixed income strategy at GMP Securities. "By September, it is expecting two rate hikes."