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Pros mixed on 'moderate' tag for labor market

After a better-than-expected jobs report on Friday, experts are still deliberating over what this means for the labor market and subsequent rate hikes.

"I think it's fair to say we're still in a moderate patch," said Stifel Fixed Income Chief Economist Lindsey Piegza. "We saw strength in October and November, but that comes against the backdrop of weakness in August and September."

Piegza told CNBC's "Squawk on the Street" that the direction of the labor market is unclear based upon some red flags found in Friday's report.

"We saw service hiring drop to a multimonth low, average hourly earnings, the average annual pay dropped back down to the 2 percent tread line again," said Piegza.

On average, 209,000 jobs have been created each month for the past 11 months and some might call that strong, not moderate.

UBS executive director Stephen Freedman said the latest jobs report clears the Fed's way for a rate hike.

"At this point, there's very little to prevent the Fed to go ahead and hike in December. It's a good thing, generally speaking, because they can finally rip off the Band-Aid," he told CNBC's "Power Lunch" on Friday. "I think they're likely to see, once they rip off the Band-Aid, that the wound has healed fairly well. The whole discussion is now going to turn more towards the pace of tightening."

JP Morgan Funds Chief Global Strategist David Kelly said the pace will start out slow.

"I think they're going to start out gradually. I would be astonished if they moved in January after moving in December," he said Friday. "The question is whether they can stick with that."

If jobs continue to grow at a rate of 200,000 jobs per month, Kelly predicted the unemployment rate would fall past 4.8 percent next year.

"At that point people may start betting on a slightly faster pace of increase," he said.

While it may be enough to tip the scale for the Fed, the labor market is just one component in a whole host of issues they must consider, said Piegza.

"Going forward, the gradual pace or the accelerated pace of rate increases will depend on the total mandate of the Fed, not just one component," she said. "We're going to have to see that inflation component increase back towards that 2 percent objective in order to justify further rate increases from here.

Still, it is imperative that the Fed raises rates in order to be able to contend with any possible economic crisis, said Ken Mahoney, president of Mahoney Asset Management.

"We need to get some arrows in the quiver. If the economy falters, we want sustainability; we want the Fed to be able to cut rates and have something to work with, and not have to take a quantitative easing play out of the ECB's playbook," he said.

"At this point, the economy should be able to withstand a quarter-point or a half-point rate hike. The Fed needs to normalize rates. We need to get rates up to, let's say, 1.5 percent by this time next year."

Former Labor Secretary Robert Reich told CNBC's "Closing Bell" that he's almost certain the Fed will raise interest rates and that the economy is doing very well; however, he still has some concerns.

"My concern is slightly more over the longer term and that's where innovation and the share economy and a lot of the things we're seeing may be putting great strain on the part of the labor force that is not too terribly well prepared for the future," Reich said.

The probability of a Fed rate hike stands at 79 percent following the jobs data release on Friday, according to the CME Group's FedWatch tool.

The data — along with comments made by European Bank President Mario Draghi — also brought U.S. equities higher, with the major indexes closing at least 2 percent higher on the session and posting slight gains for the week.

Dow Jones industrial average this weekSource: FactSet