INSTANT VIEW: Reaction to GDP, jobless data

NEW YORK (Reuters) - U.S. corporate profits fell 3.3 percent in the fourth quarter of 2007, the Commerce Department said on Thursday in a report that also confirmed U.S. economic growth slowed to a meager annual pace of 0.6 percent in same period.

The number of U.S. workers filing new claims for jobless benefits fell by 9,000 last week, the government said on Thursday, though a more reliable gauge of layoff trends rose to its highest in more than two years.

KEY POINTS:

GDP/CORP PROFITS * Wall Street analysts surveyed before the report had expected only a 0.1 percent drop in corporate profits, despite a crisis in the U.S. subprime mortgage market that has hobbled U.S. economic growth. * Analysts had forecast a 0.6 percent rise in GDP.

JOBLESS CLAIMS * Initial claims for state unemployment insurance benefits fell to 366,000 in the week ended March 22 from a revised 375,000 for the prior week, the Labor Department said. * The four-week average of new jobless claims, which is considered a more accurate measurement of employment trends since it smoothes out weekly volatility, rose to 358,000 in the week ended March 22 from 356,250 in the previous week.

COMMENTS:

ANDREW HARDING, HEAD OF TAXABLE FIXED-INCOME, ALLEGIANT ASSET MANAGEMENT, CLEVELAND, OHIO:

"People expect the data to be worst than what it is. With the jobless claims, people keep expecting it to deteriorate. There's a lot of negative angst built in right now. While numbers hit expectations, the emotional expectations are for things to be worse. All these financial facilities that are set up (by the Fed) I believe are working. We're still on a rocky road, we're not out of the woods, but we're on a better path. So I don't think the Fed will just keep lowering rates as far as the eye can see."

MICHAEL METZ, CHIEF INVESTMENT STRATEGIST AT OPPENHEIMER & CO, NEW YORK:

"I'll tell you the most striking thing I've seen in the last few days was the durable goods orders, because everybody's depending on capital spending to provide a push to the economy. It's not going to happen.

"To me what's really important now has very little to do with the economy... the Federal Reserve has made an open-ended, unlimited commitment to do whatever it takes to keep this system functioning. To me that's really the major consideration here...

"There's very little clarity as to how shallow or brief this recession will be. While there's general optimism, I'm not one of the optimists. I just don't see what's going to take us out of this. It's not capital spending, it's not construction, it's not the consumer, it's not the mover of exports. It's not enough."

DREW MATUS, U.S. SENIOR FINANCIAL MARKETS ECONOMIST, LEHMAN

BROTHERS, NEW YORK: