Unemployment figures for December are likely to show that job growth slowed last month from November's torrid pace, but the gains should still be sizable, reflecting the economy's strong momentum at the end of last year.

The jobless rate meanwhile is expected to decline to 5.3 percent from 5.4 percent, matching the 14-year low reached in June and again in October.Economists predict that the figures, to be released Friday, will show a healthy gain of about 260,000 in the key figure of non-farm payroll jobs, according to a Reuter survey. November's figures showed an unusually strong gain of 463,000.

"All the evidence would say that the economy has entered 1989 with a good deal of forward momentum," said Norman Robertson of Mellon Bank.

The closely watched employment report will be the first government statistic that offers clues about the strength of the economy at the end of 1988.

It is also likely to play an important role in Federal Reserve policy-making. Indeed, the jobs report has taken on a growing significance in the market that equals, if not exceeds, the monthly trade data.

"The employment report has become a major indicator of the extent the economy has reached its capacity limits," Robertson said.

The decline in the jobless rate over the past several months - as well as the expected fall in the December level - has raised worries over inflation.

"If the unemployment rate goes down, that would tell us that we're closer rather than further from seeing upward pressure on wages," said Robert Chandross of Lloyds Bank.

A strong showing could prompt the Fed, which has been nudging up interest rates, to tighten its grip on credit still further.

It could do this by pushing up the free-floating federal funds rate, the rate banks charge each other for short-term loans, and possibly by increasing the closely-watched discount rate, which currently stands at 6.5 percent. The Fed last increased that rate, the charge it puts on its own short-term loans to banks, in August.

Market rates have increased sharply since then, but economists disagree over whether the Fed will push up the discount rate immediately.

Despite the predicted slowdown in job growth last month, the reported rise for November and the expected increase in December together would still produce an average gain of over 360,000 jobs - well in excess of the average of 313,000 a month for the 12 months ended in November.

Economists said the huge increase reported in November was unsustainable. Some said it might be revised downward. Still, economists are bullish on the economy, now in its seventh year of expansion, given the strong pace of recent job growth.

"We've had gains that would be consistent with the early days of an expansion," said Mellon's Robertson.

Economists expect manufacturing jobs once again to show handsome gains because of robust export demand. Manufacturing jobs climbed by 71,000 in November and by an average of 38,000 a month through the 12 months ended in November.

Data emerged this week showing U.S. manufacturers had a strong December. The National Association of Purchasing Management said the economy ended 1988 with vigorous growth as production and new orders rose to their highest levels since July, based on the group's survey.