INSTANT VIEW: Weekly initial jobless claims up

NEW YORK Thu Aug 7, 2008 8:44am EDT

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NEW YORK (Reuters) - The number of U.S. workers filing new claims for jobless benefits rose 7,000 last week to the highest level in 6 years, government data on Thursday showed, but special factors continued to distort the data.

KEY POINTS:

* Initial claims for state unemployment insurance benefits increased to a seasonally adjusted 455,000 in the week ended Aug 2 from 448,000 the week before, the Labor Department said, marking the highest reading since March 2002.

* Analysts polled by Reuters had expected 423,000 new claims.

* Claims data for several weeks has been indirectly impacted by a federal program to extend unemployment benefits to cushion the impact of a slowing economy.

COMMENTS:

DAVID WYSS, CHIEF ECONOMIST, STANDARD & POOR'S RATINGS SERVICES, NEW YORK:

"We think one thing that is distorting the number is the extended benefits program that caused a lot of people to reapply. Someone who dropped out and came back in counts so we don't know how many of these people are being counted."

"Anything above 400,000 is in recession range. It does make it easier to call it a recession."

"The insured unemployment rate at 2.5 percent is consistent with a recession."

MARKET REACTION: STOCKS: U.S. equity index futures extend losses. BONDS: U.S. Treasury prices add to gains. DOLLAR: U.S. dollar extends losses. RATE FUTURES: Fed fund futures suggest about an 18 percent chance of September FOMC rate hike.

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