(Reuters) -U.S. job growth slowed more than expected in April and annual wage gains cooled, signs of a looser labor market which are good news for markets and the Federal Reserve that will likely require more such signals before pivoting from a higher for longer policy.

Nonfarm payrolls increased by 175,000 jobs last month, the Labor Department said in its employment report on Friday. March was revised up to show payrolls rising by 315,000 jobs instead of 303,000. Economists polled by Reuters had forecast payrolls advancing by 243,000. The unemployment rate rose to 3.9% from 3.8%. Wages increased 3.9% in the 12 months through April after rising 4.1% in March.

MARKET REACTION:

STOCKS: S&P 500 e-mini futures added to gains and were up 1.1% pointing to a strong open on Wall StreetBONDS: The U.S. Treasury 10-year yield fell and was last at 4.50%; Two-year yields fell to 4.772%FOREX: The dollar index retreated 0.61%, while the euro was up 0.62%

COMMENTS:

TIMOTHY CHUBB, CHIEF INVESTMENT OFFICER, GIRARD, WEST CHESTER, PENNSYLVANIA

"Market response is a sigh of relief. It was important to see wage growth moderate and not accelerate especially in the context of the inflation story."

"It's too soon to price in more rate cuts. One number doesn't make a trend. Overall, the Fed is getting the evidence it needs."

"A lot of job growth was driven by immigration recently which is good for wage growth coming down as a lot of these jobs are on the lower end of wage growth. This is a continuation of progress, both in the inflation picture and decelerating growth."

"We're starting to get a little bit more clarity into what is this landing going to look like. We've been calling for a hard-ish one. It's certainly been delayed and not denied."

"Ultimately, we're starting to see more durable progress on the economy and inflation decelerating, in a way that's not violent or dramatic. It's been coming in pretty softly so far."

BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN"The labor market just took one big step towards coming into better balance. There's nothing wrong with payrolls rising by 175,000. The danger is that the move from hot to mild doesn't stop there and it turns frigid. The risks would be greater if the Fed was still intent on hiking, but its patient pause keeps the risks of overshooting to the downside low."

JASON PRIDE, CHIEF OF INVESTMENT STRATEGY AND RESEARCH, GLENMEDE, PHILADELPHIA

    "The data's soft across the board from the Fed's perspective, which is what really matters here and an unemployment rate of 3.9% is not something disastrous. This indicates an economy that is not declining dramatically, but it definitely indicates a looser labor market."

    "The Fed's looking for data points that pull them back away from this tighter-for-longer thought process. The one caveat would be that the labor market reports are notoriously fickle and what we see this month might not be what we turn around and see next month. It gives the Fed some hope, but it does not establish the trend for them."

PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK

"This report is not too hot not too cold and it's just what the Fed wants to see. We're not seeing a pickup in wages we're still producing jobs, and the economy is doing well."

"However, the key to the report is wages which came in a little bit cooler than the market was looking for."

"It's a good report for the Fed and it's a good report for the markets."

"We need more evidence, but if we continue on this path, then I think that could change the timing of a rate cut, and it could mean instead of one, we might be looking at two rate cuts this year."

QUINCY KROSBY, CHIEF GLOBAL STRATEGIST, LPL FINANCIAL, CHARLOTTE, NORTH CAROLINA:

    "The jobs report came in lower than expectations. However, you can see from the market's reaction that it is a welcome number for the market. The market at this point is so hoping that the Fed can cut rates this year and did not want one of the hot numbers coming in. Today's report certainly offers them a cooler read of the labor landscape. In addition, and even more importantly, the unemployment rate ticked a bit higher... What this suggests is a bit of a cooling in the labor market. The reason it's important for the stock market is the stock market is looking for any signals that perhaps inflation will start to come down as the labor market cools, even at the margin. So this is market friendly."   

(Compiled by the Global Finance & Markets Breaking News team)