FOREX-Dollar gains on safe haven bid on US weekly claims

* U.S. continuing jobless claims rise to fresh record

* U.S. data suggests economy will recover later this year

* Chicago PMI up next (Recasts, updates prices, adds comments)

By Nick Olivari

NEW YORK, April 30 (Reuters) - The dollar gained on Thursday amid slight safe haven flows after a government labor report indicated that employment remains weak and that the economic recovery is not imminent.

Weekly jobless claims decreased in the latest period while continued claims notched a fresh record high. For details, see [ID:nN30500233]

Other recent data had investors betting the U.S. recovery was getting close despite an unexpectedly large contraction in the U.S. economy in the first quarter.

"Over the past year, the deterioration in initial claims, continuing claims, and the insured jobless rate has been just as bad as they were during the 1981-1982 recession, which has been the most severe in the post-World War II period ... so far," said Steven A. Wood, chief economist at Insight Economics, LLC in Danville California in a note to clients.

The euro was last down 0.4 percent lower at $1.3213 EUR= while the dollar was 0.9 percent higher against the yen at 98.44 yen JPY=.

A rise in euro zone unemployment to 8.9 percent in March from an upwardly revised 8.7 percent in February underlined the view that the euro zone economy remains weak. Other data showed that euro zone inflation remained at a record low of 0.6 percent year-on-year in April

Moves in the dollar were also being dictated by month end fixing related flows tied in part to equity related adjustments," said Brown Brothers Harriman in a note to clients. Moves were also exaggerated by thin market conditions ahead of the May Day holiday tomorrow and the start of Golden Week Holiday in Japan.

Investor focus now shifts to a report on business activity in the U.S. Midwest in April scheduled for 9:45 a.m. (1345 GMT). The Chicago PMI index is forecast to rise to 35.0 from 31.4 previously. (Reporting by Nick Olivari; Editing by Kenneth Barry)