NEW YORK (Reuters) - The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, government data on Thursday showed, suggesting persistent weakness in the labor market after stumbling badly in recent months.
U.S. May CPI fell 0.3 pct
US Q1 current account gap widens to $137.3 billion
MICHAEL MORAN, CHIEF ECONOMIST, DAIWA SECURITIES AMERICA, NEW YORK
"The inflation showed a little bit sharper drop in energy prices than expected, but it was not shocking. We knew energy prices were going to be down. The core component was right in line with expectations with a rise of 0.2 percent, giving us a year-over-year inflation rate of 2.3 percent.
"The most important number was the unemployment claims number. We've been on the higher side for the past two months on average. You cannot explain this away with normal random volatility. It has not been a marked deterioration, but there has been some slippage in the strength in the labor market. My call is that the Fed won't do anything and I'm sticking with that, but it would not be shocking to see the Fed do something minor (at next week's policy meeting)."
HUGH JOHNSON, CHIEF INVESTMENT OFFICER OF HUGH JOHNSON ADVISORS LLC IN ALBANY, NY
"Certainly the consumer price news was in line with expectations and is not likely to move the market. The decline of 0.3 percent largely due to the decline in energy prices and that was fully expected and not likely to have any impact on the markets. The jobless claims number is perhaps more important. The focus has been on employment and the number is, on balance, disappointing. The expectation had been for a decline but not a very significant decline. Jobless claims have been stuck around the 380,000 to 385,000 level for quite a period now. It indicates to me that employment conditions have slowed and there is very little sign of life. It doesn't look as though employment conditions are improving. So the economy has slowed, the economy as measured by employment conditions has slowed and there doesn't appear to be any change when you look at the claims numbers."
"Everything is pretty much in-line with expectations but more importantly you are not likely to see much from the markets until we get the Greek vote out of the way on Sunday. Everybody is sort of waiting to see what is going to be the impact of the vote in Greece. I say that particularly because you saw the rise in yields in Europe and you would expect a little bit of downward pressure. "
PETER CARDILLO, CHIEF MARKET ECONOMIST, ROCKWELL GLOBAL CAPITAL, NEW YORK
"Job growth is basically still showing weakness and that is obviously not good news. Nevertheless, the data is not going to be a market mover, it's all about Europe and options expiration. The data shows that there is skepticism on the part of companies that are hiring. That is the real reason."
WAYNE KAUFMAN, CHIEF MARKET ANALYST AT JOHN THOMAS FINANCIAL IN NEW YORK
"Jobless claims were a little worse than expected but that's not so surprising. No one is paying attention to CPI. The markets are mostly focused on Europe."
GEORGE DAVIS, CHIEF TECHNICAL ANALYST, RBC CAPITAL MARKETS, TORONTO
"A higher number on claims which is obviously continuing to be a focal point for the market. That will be a mild bearish factor for the dollar over the short term. I don't think CPI will have a huge market impact as inflation right now is not the focus. The main concern is still in the employment area."
STOCKS: U.S. stock index futures hold steady.
BONDS: U.S. Treasury debt prices pared losses, 30-year bonds turned higher. U.S. TIPS inflation breakeven rates were little changed..
FOREX: The dollar extended its losses versus the yen. The euro extended its gains versus the dollar.
(Americas Economics and Markets Desk; +1-646 223-6300)