INSTANT VIEW: U.S. economy grows slightly better than expected

NEW YORK (Reuters) - The U.S. economy grew at an upwardly revised 0.9 percent in the first quarter, slightly better than previously thought because of lower demand for foreign goods and services and a rise in investment in non-residential structures, the Commerce Department said on Thursday.

The number of U.S. workers filing new claims for jobless benefits rose slightly more than expected last week, the government said on Thursday.

KEY POINTS:

GDP: * The department estimated a month ago that gross domestic product, which measures the total output of goods and services within U.S. borders, grew at a 0.6 percent rate. But it raised the growth estimate to take into account updated economic and trade data. * Growth in the January-March quarter was in line with economists' expectations for a revision to 0.9 percent growth after the economy grew 0.6 percent in the fourth quarter of 2007.

JOBLESS CLAIMS: * Initial claims for state unemployment insurance benefits climbed to 372,000 in the week ended May 24 from an upwardly revised 368,000 for the prior week, the Labor Department said. * Analysts polled by Reuters were expecting 370,000 in new claims, up from the originally reported 365,000 in the prior week.

COMMENTS:

JAMES KOCHAN, FIXED-INCOME STRATEGIST, WELLS FARGO FUNDS

MANAGEMENT, MENOMONEE FALLS, WISCONSIN:

GDP: "The GDP was close to what was anticipated. But what surprised me most is the change in inventories: There was a $14.4 billion drop in private inventories, previously estimated as a $1.8 billion rise. While this subtracts from first-quarter growth, this figure shows that inventories are not excessive by any strength. It shows you that inventories are under control.

JOBLESS CLAIMS: "As for jobless claims, we still aren't seeing a tremendous deterioration in the labor market. In the good old days, when the U.S. was in recession you'd see declines of 150,000 and 200,000 a month. We aren't really seeing that today."

DAVID WYSS, CHIEF ECONOMIST, STANDARD & POOR'S, NEW YORK

GDP: "Right were we expected it to be. The revision was in line with expectations. Still a pretty darn good number.

"The economy's stronger than we thought it was. It's stubbornly refusing to go negative, unlike most politicians.

JOBLESS CLAIMS: "Again, about the same as they were last week. So it's hard to make too much of that. Generally decent numbers, hard to get too negative. Jobless claims are still running much lower than you would expect at this point in a recession.

"GDP is staying positive, clearly up from where we might expect it to be. the recession is acting like a typical Yankees game, it's postponed, not canceled. The economy has a lot of momentum behind it, it's still strong."

KEVIN FLANAGAN, FIXED INCOME STRATEGIST FOR GLOBAL WEALTH