Instant view: Jobless claims fall to lowest since April 2008

NEW YORK (Reuters) - New claims for unemployment benefits dropped last week to its lowest in more than 3-1/2 years, suggesting the labor market recovery was gaining speed.

Economic growth was slower than previously estimated in the third quarter on a sharp drop in healthcare spending, but stronger business investment and a fall in inventories pointed to a pickup in output in the current period.

COMMENTS:

PETER BOOCKVAR, EQUITY STRATEGIST, MILLER TABAK + CO IN NEW YORK

"The downward trend in initial filings over the past three weeks is a definite positive in terms of firings while we still await the big jumps in hiring's. Due to what I believe will be a deep, not mild, recession in Europe, the pace of hiring in 2012 will likely still be mediocre."

ANDREW WILKINSON, CHIEF ECONOMIC STRATEGIST, MILLER TABAK & CO., NEW YORK

"No change in the script here. The employment situation continues to show strong signs of a recovery and goes against the grain of what people felt four months ago. There has been a limited impact from the euro zone fallout and hopefully 2012 will be equally strong."

ROBBERT VAN BATENBURG, HEAD OF GLOBAL RESEARCH, LOUIS CAPITAL MARKETS, NEW YORK

JOBLESS CLAIMS: "They are good. They are below expectations. It seems to be going the right way. I don't know how permanently it is. It seems like California and New York are losing a lot of claims which might be related holiday hirings."

GDP: "Consumer spending is revised down a lot so that's really disappointing. The first quarter number next year is going to recoil from the anemic effect of the second half of the year."

OMER ESINER, CHIEF MARKET ANALYST, COMMONWEALTH FOREIGN EXCHANGE, WASHINGTON

"It's disheartening to see a one handle on the GDP number. While it's old news, it's concerning to see that consumer spending was revised so sharply downward. It suggests the economy had less momentum going into the fourth quarter than we'd expected. But more recent reports suggest a stronger rate of growth for the fourth quarter, so that offsets the downward revision. Jobless claims are a case in point. They continue to show an encouraging trend of declining claims. I think that reinforces the notion that the economy has strengthened in the fourth quarter."

DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS

"The third estimate for Q3 GDP was revised down to 1.8% from a second estimate of 2.0%, putting the number further below the first estimate of 2.5%. The market had expected no revision, but forecasters were split into two camps, those expecting a downward revision on service spending and those looking for an upward revision based on some more widely watched data elsewhere. In the report, a sharp downward revision to service consumption outweighed generally positive revisions elsewhere, and with the latter led by inventories this data suggests the economy had less momentum in Q3 than previously thought."

VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS

"The number of people filing their first claim to qualify for unemployment benefits fell yet again in the week ending December 17, to 364,000 people. This compares to expectations that claims would rebound to 375k after two weeks of double digit declines. In each of December's reports (three weekly readings), initial claims have fallen such a degree that a historical context describes the level. This reading represents the lowest claims count since April 2008, before corporate America knew the extent of the financial market disaster."