Instant View: Jobless claims up; May private jobs up 133,000

NEW YORK (Reuters) - New claims for unemployment benefits rose last week for the fourth straight week, which could heighten concerns the labor market recovery is softening.

U.S. private employers created 133,000 jobs in May, fewer than expected, a report by a payrolls processor showed on Thursday.

U.S. economic growth was a bit slower than initially thought in the first quarter as businesses restocked shelves at a moderate pace and government spending declined sharply.

COMMENTS:

CRAIG DISMUKE, CHIEF ECONOMIC STRATEGIST, VINING SPARKS, MEMPHIS, TENNESSEE

"The data confirm what we have been saying. We have 2 percent growth this year and this quarter shows that. We are in a slow-growing economy. Two percent is a new reality with the external shocks from Greece and Spain. That's why we are seeing bonds trading strong with the safe-haven bids from Europe."

"The ADP number is not a real material miss. Jobs will grow at 150,000 a month with some ups and downs."

"Jobless claims are the biggest concern of all of this. We are bumping closer that 400,000 threshold again. If we see this weekly print several more times, we could see job growth falling toward 100,000 a month."

SEAN INCREMONA, ECONOMIST, 4CAST LTD, NEW YORK

"No surprises on GDP. We are still seeing fairly modest growth. The downward revision was mostly in inventories, which was the breakdown we were looking for. Final sales were a bit firmer, but that doesn't really break from this modest growth trend that we have seen so far this year.

"These employment numbers are getting to the disappointing side now. Jobless claims surprised on the upside and really are suggesting that labor market momentum has stalled at this point. ADP earlier wasn't too bad but it is still not showing any sort of vigor."

JOSEPH TREVISANI, CHIEF MARKET STRATEGIST, WORLDWIDE MARKETS, WOODCLIFF LAKE, NEW JERSEY

"Weak GDP and rising initial jobless claims are not a formula for economic growth though they may provide support for the dollar as the world continues to worry about its economic future."

"A weak ADP report is going to dampen expectations for even a reasonable non-farm payrolls report on Friday. The euro will weaken marginally on concern for the health of the U.S. economy, the safe haven trade."

TODD SCHOENBERGER, MANAGING PRINCIPAL AT THE BLACKBAY GROUP IN NEW YORK

"The surprising thing about the claims is that they aren't over 400,000 at this point. I expect number will continue to rise, which is disappointing. It also doesn't bode well for tomorrow's report.

"The GDP number isn't a surprise, but anytime you dip under 2 percent we always head into recession. The final read will be much more important. It doesn't look good for the economy right now."

WAYNE KAUFMAN, CHIEF MARKET ANALYST AT JOHN THOMAS FINANCIAL IN NEW YORK

(ON ADP:)

"It's a little light, but I don't think anyone will be very surprised. Recent data hasn't been great, and while this isn't a horrible number, it shows we're in a lackluster period in the economy right now. Hopefully the recent negative trends will reverse themselves, but it is hard to see what will cause that."

MARKET REACTION:

STOCKS: U.S. stock index futures trim earlier gains after the ADP data. Futures cut gains, briefly turned negative after jobless claims and GDP.

BONDS: U.S. Treasury debt prices were little changed after the ADP report but rose after the claims and GDP data.

FOREX: The dollar holds losses versus the euro, yen after the ADP figures and then extended losses after the jobless claims and GDP releases.

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