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Europe shares close higher despite US jobs data

European equities closed higher on Friday despite a worse-than-expected December U.S. jobs report.

US jobs disappoints

The pan-European FTSEurofirst 300 Index provisionally closed higher by 0.5 percent at 1,321.53 points, although it did finish off session highs.

U.S. job creation stumbled in December, with the economy adding just 74,000 positions — its worst increase in nearly two years — even as the Federal Reserve voted to take the first steps in eliminating its stimulus program.

(Read more: Job growth weak, raising questions about Fed move)

The unemployment rate dropped to 6.7 percent, below economist estimates, and the labor force participation rate tumbled to 62.8 percent, its worst level since January 1978.

However, markets took some solace from the fact that the cold weather may have affected the jobs number, while signs of slight economic weakness will could reduce the pace at which the Fed scales back its equity-friendly stimulus.

(Read more: )

"The big take-away is the big increase in the number of people not working or looking for work, up 525,000," wrote Ishaq Siddiqi, market strategist at ETX Capital.

"So, what do these numbers mean to markets? Well, Janet Yellen now has more pressure on her to construct a beefier forward guidance, which offers more clarity on thresholds related to the labor market, as the Fed have clearly said they are not going to tighten monetary policy, but the 6.7 percent rate previously was touted as a number the Fed indicated it was comfortable to tighten at."

(Read More: Job growth weak, raising questions about Fed move)

Dovish Draghi

In Asia, equity markets declined on Friday after the latest round of Chinese economic data pointed to slowing momentum in the world's second-largest economy. China's December trade surplus came in at $25.60 billion, far short of the $31.15 billion Reuters had predicted.

(Read More: China outstrips US as world's biggest goods trader)

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