Instant view: U.S. jobless claims fall to 367,000 in latest

NEW YORK (Reuters) - New U.S. claims for unemployment benefits fell last week, a government report showed on Thursday, pointing to more healing in the nation's battered jobs market.

COMMENTS:

PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK

"Initial claims look reasonably good, falling a bit more than expected, establishing that the general trend remains downward, which was in doubt for a few weeks. Continuing claims are transmitting the same message, though not quite as strongly in the January payroll survey week as before. But it's still a picture of layoffs slowing. We're well into the normal range for initial claims so the big whacking of work forces is over and we're just waiting for pickup in activity to lift hiring a bit more strongly.

"Productivity growth slowed, as expected. We had a very strong third quarter. This establishes that the full-year pace of productivity growth has also slowed quite substantially. Productivity growth oscillates, but in the year just ended it was up 0.5 percent. It was up 2.5 percent for the year ended with the fourth quarter of 2010. For the moment that's a good thing because it means that any expansion in demand will lead to hiring."

CHRISTOPHER LOW, CHIEF ECONOMIST, FTN FINANCIAL, NEW YORK

"The trend continues to drop. What I think is most encouraging -- there's been a lot of volatility in claims since the middle of December -- it's encouraging that now that December's behind us that the downward trend has resumed.

"It certainly suggests we will continue to see job growth at the higher end of the recent range, 100,000 to 200,000. If claims continue to drop then we should see job growth stronger than that."

JACOB OUBINA, SENIOR U.S. ECONOMIST, RBC CAPITAL MARKETS,

NEW YORK

"The good news is that it seems like the seasonal volatility in jobless claims has finally waned and we are starting to get some clarity here. The range seems to be 375,000. On the face of it that is good and an improvement, but it is important to keep in mind that hiring remains extremely weak and there are a lot of job cuts in the pipeline."

URI LANDESMAN, PRESIDENT, PLATINUM PARTNERS IN NEW YORK

"This is a mild positive, but with the market at these lofty levels, you need to have continued good news for the market to sustain its gains. This is not a particularly meaningful datapoint, but it is more good than bad."

BETH ANN BOVINO, SENIOR U.S. ECONOMIST, STANDARD & POOR'S

RATINGS SERVICES, NEW YORK

"This is good news that it shows jobless claims are staying below recession level of 400,000. This set of data is certainly moving in the right direction, but we have to wait and see what happens with the payroll data tomorrow."

MICHAEL WOOLFOLK, SENIOR CURRENCY STRATEGIST, BNY MELLON,

NEW YORK

"This is certainly a positive in front of non-farm payrolls and further supports the view that the U.S. economy is creating more jobs with the prospect for a lower unemployment rate. Perhaps we can break below 8 percent by year end."

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

REUTERS

"Initial and continuing claims continued a recent pattern of alternating direction, and this week's moves were downwards, by 12k to 367k in the case of initial claims, and by 130k to 3.437 mln in the case of continuing claims, both below respective market consensus outcomes of 375k and 3.56 mln. The data looks consistent with a continuing labor market improvement, though the signals for the January non-farm payroll are far from conclusive, with improvement in the initial claims 4 week average from December quite modest.

"This is the 7th consecutive week in which initial claims have moved in the opposite direction from the preceding week, while continuing claims have now reversed direction for 9 consecutive weeks. Volatility has been high in the case of continuing claims, with each of the last 3 moves exceeding 100k. Volatility should decline as we move further away from the holiday period when seasonal adjustments are large."

MARKET REACTION:

STOCKS: U.S. stock index futures turn positive.

BONDS: U.S. Treasury debt prices pare gains.

FOREX: The dollar retains gains vs the euro, losses versus the yen.

(Americas Economics and Markets Desk; +1-646 223-6300)