INSTANT VIEW: Jobless claims fall, trade deficit widens

NEW YORK (Reuters) - The number of U.S. workers applying for unemployment benefits tumbled by a greater-than-expected 53,000 last week, but a moving average of claims was its highest in two and a half years, a government report showed on Thursday.

The U.S. trade deficit widened unexpectedly in February as imports of consumer and other goods set a record and grew faster than exports, which hit a record for the 12th consecutive month, a U.S. government report showed on Thursday.

KEY POINTS:

JOBLESS CLAIMS- * Jobless claims fell to 357,000 in the week ended April 5 from an upwardly revised 410,000 in the previous week, the Labor Department said. Last week's reading is the highest since September, 2005. * Analysts polled by Reuters were expecting 385,000 jobless claims in the most recent week. * The four-week moving average of new claims, a more reliable guide to underlying labor market trends because it smooths out weekly data fluctuation, rose to 378,250, the highest since October, 2005.

TRADE- * The monthly deficit widened 5.7 percent to $62.3 billion, from an upwardly revised estimate of $59.0 billion for January. Wall Street analysts had expected the gap to narrow to $57.5 billion. * Despite slow U.S. economic growth that has spawned fears of a recession, imports of goods and services rose 3.1 percent to $213.7 billion, the Commerce Department report showed. * In a broad-based sign of renewed U.S. demand, records were also set in individual categories for consumer goods, capital goods, industrial supplies and materials and food, feed and beverages.

COMMENTS:

JOSEPH BRUSUELAS, CHIEF U.S. ECONOMIST, IDEAGLOBAL, NEW YORK:

"After a strong move to 410,000, the initial claims series fell back for the week ending April 5. The continuing claims series, which is released with a one-week lag, increased to 2.94 million. The headline did beat market expectations, but the smoothed four-week moving average and the continuing claims series each strongly suggest further deterioration in the rate of unemployment that looks set to rise consistently for the remainder of the year."

GREGORY MILLER, CHIEF ECONOMIST, SUNTRUST BANKS, ATLANTA:

"That leaves the average up near 465,000, so we're still in a range that's consistent with steady deterioration in the labor market.

"If this turns into a trend, if we get back under in the 325,000 to 350,000 range, then we'll be talking about swapping months between job losses one time and maybe regaining some the following. But if we stay in this over 350,000 to 400,000 range, it's consistent with at least modest job losses on a continuing basis. Maybe we don't get to triple digits, suffer 150,000 or 200,000 jobs lost, but somewhere in the range of 50,000 to 100,000 is going to be the rule rather than the exception.

"Frankly, claims are one of Bernanke's timely indicators that the Fed is watching for near term information about what the economy is doing. This was just one data point and they'll wait until it establishes a trend. This probably doesn't push us way off the current trend. But, it suggests the economy remains under stress, so they're still going to be working on reviving the growth side."

JOSEPH LAVORGNA, SENIOR ECONOMIST, DEUTSCHE BANK, NEW YORK:

"What you're getting is a slowdown in the economy, imports are picking up, sitting in inventories, there's going to be a bit of a GDP wash. I don't know whether we'll be positive for the first quarter, but certainly the economy's weak. That's what the claims numbers are telling you...

"There are so many other issues going on with the markets and positioning, in terms of banks trying to get assets off balances sheets. The data are important only to the extent that they drive expectations significantly different from where they are at the moment. People are in the recession camp, so I don't think the numbers matter so much."

SAM BULLARD, ECONOMIST, WACHOVIA SECURITIES, CHARLOTTE, NORTH CAROLINA:

"Jobless was a pleasant surprise, there were a lot of questions how valid (last week's) number was, but given that we had such an early Easter holiday this year it does appear that there were some seasonal adjustment issues. Seeing the number come in at 357 there was definitely some relief there. That being said, the trend is moving higher in claims, and that trend is not supportive of employment growth."

MICHAEL DARDA, CHIEF ECONOMIST, MKM PARTNERS LLC, GREENWICH, CONNECTICUT:

"A pullback in jobless claims is better than a surge, which is what we saw last month, but I think you have to look at the four-week average, and that still moved up and remains on the low edge of a danger zone."

"The four-week moving average has been in an uptrend for a while, consistent with an economy losing steam."

MARKET REACTION: * BONDS: U.S. Treasury debt prices hold gains. * CURRENCIES: The dollar holds losses on the session. * STOCKS: U.S. stock indexes pare losses slightly. * RATE FUTURES: Rate futures still pricing in a slightly less than 50 percent chance of a 50 basis point rate cut at the next meeting.