INSTANT VIEW: Retail sales, jobless claims disappoint

NEW YORK (Reuters) - Sales at U.S. retailers unexpectedly fell in July from June, a government report showed on Thursday, casting a shadow over an anticipated rebound in consumer spending in the third quarter.

KEY POINTS: * The Commerce Department said total retail sales edged down 0.1 percent from increasing a revised 0.8 percent in June. Sales in June were initially reported to have risen 0.6 percent. * Analysts polled by Reuters had forecast retail sales rising 0.7 percent in July, expecting a boost from the government's "cash for clunkers" program, which gives consumers cash to swap aging gas-guzzlers for new, more fuel efficient models. * Excluding motor vehicles and parts, sales fell 0.6 percent in July after rising 0.5 percent the prior month. Analysts had expected a 0.1 percent gain in sales excluding autos. * Gasoline station sales fell 2.1 percent in July, reflecting a retreat in gasoline prices during the month, after surging 6.3 percent in June. Excluding gasoline, retail sales nudged up 0.1 percent. Sales of building materials were down 2.1 percent in July after falling 0.6 percent in June.

JOBLESS CLAIMS: The number of U.S. workers filing new claims for jobless benefits rose unexpectedly last week by a slight amount as the weak labor market struggled to stabilize, a government report showed on Thursday.

KEY POINTS: * Initial claims for state unemployment insurance benefits climbed 4,000 to a seasonally adjusted 558,000 in the week ended August 8 from 554,000 the prior week, the Labor Department said. A government official said there was "nothing unusual" in the report. * Analysts polled by Reuters were expecting claims to dip slightly to 545,000 from the previously reported 550,000 in the earlier week. * The number of people collecting long-term unemployment benefits slipped by 141,000 to 6.20 million in the week ended August 1, the lowest level since April 11. The insured unemployment rate dipped to 4.7 percent from 4.8 percent.

COMMENTS:

JAY MUELLER, SENIOR PORTFOLIO MANAGER WITH WELLS CAPITAL

MANAGEMENT, MILWAUKEE, WISCONSIN:

"Ex-autos is a very negative number and correlates with personal income and spending data we got recently. It's not easy to spend money when more and more people are out of work. If your income is going down and you are not borrowing more money, how are you going to spend more?"

MATTHEW STRAUSS, SENIOR CURRENCY STRATEGIST, RBC CAPITAL

MARKETS, TORONTO:

"The decline in the headline number for retail sales despite much talk of the 'cash for clunkers' program came as a big disappointment. And when you also look at the details of the report, they are also pretty dismal. I'm not surprised to see the dollar giving up its earlier gains versus the yen as investors are flocking to the Japanese currency as a safe haven. Looking forward, markets will pay very close attention to consumer behavior to test the sustainability of this recovery."

CHRISTOPHER LOW, CHIEF ECONOMIST, FTN FINANCIAL, NEW YORK

RETAIL SALES: "This is just awful. We had a downward trend in consumption since July of last year. Consumers have cut spending every month. The big surprise is that we thought "cash-for-clunkers" was going to add to GDP but instead it took away spending elsewhere. It's tough to say the recession is over. We have transitioned from steep decline to a mild decline but we are still declining."

JOBLESS CLAIMS: "It does seem to say claims are going sideways. It's likely we settled into a range of 200,000 to 300,000 in job losses per month at least for now."

KEVIN FLANAGAN, FIXED INCOME STRATEGIST FOR GLOBAL WEALTH

MANAGEMENT, MORGAN STANLEY, PURCHASE, NEW YORK:

"Certainly retail sales were a lot softer on the surface than expected. It looks like there is underlying weakness. Pretty much all the key categories outside of autos were on the negative side of the ledger. The American consumer has yet to join the party.

"In jobless claims, you have to wonder, do we stall out here or do we experience some improvement? We have seen a nice little pop in Treasuries with both numbers coming in visibly softer than what was forecast."

PETER BOOCKVAR, EQUITY STRATEGIST, MILLER TABAK & CO, NEW

YORK:

"Retail sales were unexpectedly weaker than expected, suggesting that the money spent on the 'Cash for Clunkers' plan wasn't spent on other things. The claims data shows that the labor market, while improving, remains difficult. People are still losing jobs. Less bad doesn't mean good. It's still tough, and it's a wake-up call."

MARKET REACTION: STOCKS: U.S. stock index futures pared gains. BONDS: U.S. Treasury debt prices reduced losses. DOLLAR: U.S. dollar fell against the yen and rose against the euro.