INSTANT VIEW: Jobless claims higher than expected

NEW YORK (Reuters) - The number of U.S. workers filing new claims for jobless benefits rose last week to 516,000, the highest level since the weeks following the September 11, 2001 attacks, the Labor Department reported on Thursday.

U.S. imports fell by a record 5.6 percent in September and exports suffered their steepest drop since September 2001, narrowing the monthly trade deficit slightly more than expected, a U.S. Commerce Department report showed on Thursday.

KEY POINTS:

JOBLESS CLAIMS: * The figure outstripped forecasts, with analysts polled by Reuters expecting initial claims to be only 484,000. * The claims were last at this high a level in the week ended September 29, 2001, when they were 517,000. * A four-week moving average of claims, which smoothes out weekly variations, was 491,000, the largest since March 1991. * Continuing claims reached 3.897 million for the week ended November 1, up from 3.832 million the prior week and the most people filing for ongoing unemployment assistance in a quarter of a century.

TRADE BALANCE: * A record drop in imported oil prices and the lowest auto and auto parts imports since February 2004 helped trim the monthly trade gap to $56.5 billion. * The reading was slightly below the consensus estimate of $57 billion made by Wall Street analysts. * The monthly goods and services trade gap was the lowest since October 2007.

COMMENTS:

JOEL NAROFF, PRESIDENT, NAROFF ECONOMIC ADVISORS, HOLLAND, PENNSYLVANIA:

JOBLESS CLAIMS: "They are telling us that the unemployment rate will continue to grow. Eight percent or maybe nine percent is likely to happen depending how the auto sector is going to do. That is a severe recession to say the least. But no one really knows what's going to happen to the auto sector.

"Rising unemployment rate affects the economy in a real way and depresses consumer confidence...It argues for real distress year-end shopping season for retailers."

TRADE GAP: "The drop in oil price is a factor no doubt about it. People are just not driving that much more. They are not driving Hummers. It's not enough to say it's just oil. We are seeing a decline in everything -- imports and exports. That's not good. You don't want it to happen this way. It tells me everybody is hurting."

DANA SAPORTA, ANALYST, DRESDNER KLEINWORT, NEW YORK:

"The initial claims data came in came in much worse than expected at 516,000. We no longer have hurricanes or other special factors to blame for elevated numbers as we did say in September.

"So the higher level we are seeing is probably reflecting a fundamental weakening in the labor market. It suggests that the unemployment rate in the U.S., last reported at 6.5 percent for October, will continue to rise, probably hitting 7.5 percent or more sometime in 2009.

"Also, the continuing claims figure...is on the rise and that indicates that those individuals who have lost a job are finding it increasingly more difficult to find new employment. So it tells the same story."

TRADE:

"The fact that the trade deficit narrowed to $56.5 billion could suggest that we may see an upward revision to third quarter GDP when it is next reported. There is a lot more September data we need to learn before we can make a final determination about the direction of the revision."