INSTANT VIEW: Jobless claims fall in latest week

NEW YORK (Reuters) - The number of U.S. workers filing new claims for jobless benefits fell 20,000 last week and was in line with forecasts as the impact of hurricanes Gustav and Ike eased, government data on Thursday showed.

KEY POINTS: * Initial claims for state unemployment insurance benefits declined to a seasonally adjusted 478,000 in the week ended Oct 4 from a revised 498,000 the prior week, the Labor Department said. * It was the lowest reading since mid-September, but claims remain at levels indicating a weak U.S. employment climate. * Analysts polled by Reuters had forecast 478,000 new claims versus a previously reported count of 497,000 the week before.

COMMENTS:

NIGEL GAULT, CHIEF U.S. ECONOMIST, GLOBAL INSIGHT, LEXINGTON, MASSACHUSETTS:

"The hurricane impact is weakening the effect on the numbers. That's actually not good news.

"We haven't peaked. It's going to get worse. We're going to lose a lot of jobs in the immediate future.

"It says the job market is deteriorating... Remember last month, we saw 159,000 jobs lost and that was the worst so far? Well, it's going to keep getting worst than that. We're expecting 200,000 jobs lost on average in the fourth quarter per month.

"The credit crunch was gathering force even before the latest convulsions, and now it's going to get worse. Companies are going to pull back on hiring, everybody across the whole economy is pulling back. They're battening down the hatches, that's means they won't be hiring, and unfortunately there will be more firing."

KIM RUPERT, MANAGING DIRECTOR, GLOBAL FIXED INCOME ANALYSIS, ACTION ECONOMICS LLC, SAN FRANCISCO:

"I don't think this is the big news for the day even though claims are an important more or less real time indicator of the employment situation. The headline claims number fell a little bit more than I think many were looking for but the continuing claims data remain very elevated. We're still seeing distortions from hurricanes Ike and Gustav so I don't think we can get a real clean read on these numbers."

ANNA PIRETTI, SENIOR ECONOMIST, BNP PARIBAS, NEW YORK:

"The overall message is that the labor market remains quite weak. We know claims have been boosted by the storms, but the trend remains sharply up and the economy is deteriorating."

"Payrolls will continue to shrink in the months ahead. We could see number of minus 100,000 or more. We could see the unemployment rate could rise to 7 percent. Earnings prospects will worsen and cut into personal consumption."

STEVEN BUTLER, DIRECTOR OF FX TRADING, SCOTIA CAPITAL, TORONTO:

"We keep seeing poor data but it's taking a back seat to so many other events that are going on. The jobless claims just breezed by here because people have other things to think about. The G7 is on everyone's mind now.

"The market is trying to feel better today, but it's a struggle to have a whole lot of confidence. I'd love to see credit markets ease a bit, but lending remains tight, so I'm not too comforted. The 50-basis point cut was good but I would have loved to see 100. It seems authorities are always playing catch-up. We've been putting all these band-aids on this crisis but sooner or later we're going to have to put the thing in a full body cast."

MARKET REACTION: STOCKS: U.S. equity index futures hold gains BONDS: Treasury debt prices hold losses DOLLAR: U.S. dollar holds losses against euro, gains against yen RATE FUTURES: Fed fund futures steady, suggesting a nearly 94 percent chance the Fed will cut rates by 25 basis points in October.