Corrects second paragraph to show traders see a 97% chance of no rate cut this month

Jan 9 (Reuters) - Short-term interest rate futures dropped Friday after the U.S. Labor Department reported the December unemployment rate fell to 4.4%, prompting traders to boost bets that the Federal Reserve will leave short-term borrowing costs on hold for longer.

After the report, rate futures reflected a 97% chance the Fed will not deliver a rate cut this month, compared with about an 88% chance seen before the report.

(Reporting by Ann Saphir; editing by Philippa Fletcher)

((Ann.Saphir@thomsonreuters.com; 312-593-8342))