Deutsche Bank's LaVorgna: Jobs report good, but ...

Trends in markets & employment

Don't expect U.S. job gains to keep growing at the same pace as last month, Deutsche Bank's Joe LaVorgna said Friday.

"It's a great report, there's no question about it, but the reason I don't think it's likely to continue is simple. Job growth typically slows when you get to 5 percent unemployment," the bank's chief U.S. economist told CNBC's "Squawk Alley."

The October jobs report released earlier Friday said the unemployment rate had fallen to 5 percent and that 271,000 jobs had been created last month, well above the expected 180,000. Wages rose 0.4 percent from September.

"It doesn't accelerate because you're running out of people," he said. "It's more likely that the wage number — which showed a decent acceleration — it's more likely that that continues than we continue at 271,000 a month."

BOOM! Nonfarm payrolls up 271,000; jobs rate at 5%
Charles Evans
Fed's Evans: We may be ripe for rate hike, but...

"I think Joe's comments are interesting because what he's really talking about is, if job creation slows a little bit, but the nominal components — wages and price inflation — pick up a little bit, that sort of smells like stagflation to me," Jim Paulsen, Wells Capital Management chief investment strategist, said in the same interview.

The data sent U.S. Treasurys plunging as benchmark 10-year yields rose above 2.3 percent and 2-year note yields briefly spiked to a five-year high.

Paulsen said the move in the bonds market points to the Federal Reserve lifting off in December, which will bring trouble to all financial markets.

He said the market is in a "bad news is good news" pattern, since the catalyst for its recent rally was spurred by the Fed decision not to raise interest rates in September.

The odds of a December rate hike rose drastically after the Fed left the door open for one with its October meeting statement and gained further steam after Fed Chair Janet Yellen said Wednesday next month's meeting is a "live possibility" for an increase, provided the data are supportive.