Dec 6 (Reuters) - The dollar index firmed on Friday after jobs data reinforced the impression that the U.S. economy remains in a relatively healthy state, while a key reading of inflation expectations rose.

Though the U.S. economy added 227,000 jobs last month -- more than the 200,000 consensus forecast in a Reuters poll -- and the two previous months were revised higher, the unemployment rate rose and participation fell, which the market interpreted as solidifying the case for another round of Fed easing this month.

The University of Michigan Surveys showed consumer sentiment rising more than forecast while one-year inflation expectations jumped by three tenths.

Even with the payrolls beat and rise in inflation expectations the market was discounting 21.2bp of Fed easing after the conclusion of the upcoming FOMC meeting on Dec. 18, versus 17.6bp shortly before the non-farm payrolls report.

Chicago Federal Reserve president Austan Goolsbee said that economic conditions will determine how fast the Federal Reserve cuts rates from here, but added he hopes the Fed will be homing in on a stopping point by the end of next year.

In her first major policy speech, Federal Reserve Bank of Cleveland President Beth Hammack said she’s keeping her options open when it comes to the central bank’s next policy meeting, as broader economic conditions continue to argue for a slowdown in the pace of rate cuts.

Federal Reserve Governor Michelle Bowman said that inflation risks to the economy remain real and that augurs caution with further decisions on central bank rate cuts.

San Francisco Fed President Mary Daly said that the Fed's previous framework was aimed to confirm 2% inflation wasn't a cap and underscore that the U.S. central bank wouldn't fight a healthy labor market if inflation is subdued. She said that policymakers are ready to raise rates if inflation breaks out again.

Two-year U.S. Treasury yields fell 4bp and the 2s-10s curve steepened by 2bp.

The S&P 500 and the Nasdaq hit intraday record highs as traders increased bets on a Fed rate cut this month following the U.S. jobs data. The S&P 500 was 0.24% higher in New York afternoon trade.

WTI oil fell 1% and was headed for weekly losses as analysts projected a supply surplus next year on floundering demand despite an OPEC+ decision to delay output hikes and extend deep production cuts to the end of 2026.

Copper was 0.1% higher and gold had firmed 0.17%.

Heading toward the close: EUR/USD -0.37%, USD/JPY -0.06%, GBP/USD -0.2%, AUD/USD -1.13%, DXY +0.36%, EUR/JPY -0.44%, GBP/JPY -0.31%, AUD/JPY -1.21%.

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(Burton Frierson)

((burton.frierson@thomsonreuters.com))