INSTANT VIEW: Jobless claims, personal spending rise

NEW YORK (Reuters) - The number of U.S. workers filing initial claims for unemployment benefits rose a bigger-than-expected 35,000 last week, and the number of workers remaining on jobless benefits climbed to a four-year high, the Labor Department said on Thursday.

U.S. personal spending rose by 0.4 percent in March, twice as much as forecast and despite a cooling economy, while a key inflation measure was up by a bit more than expected, government data showed on Thursday.

KEY POINTS:

JOBLESS CLAIMS * Initial claims for jobless benefits increased to a seasonally adjusted 380,000 in the week ended April 26, from a revised 345,000 the previous week. * Analysts polled by Reuters had expected claims to rise to 360,000 from an initially reported 342,000. * The four-week moving average of new claims, a more reliable guide to underlying labor trends because it irons out weekly fluctuations, fell last week to 363,750 from a revised 370,250.

PERSONAL SPENDING * Economists polled by Reuters had forecast personal spending to rise 0.2 percent compared with 0.1 percent gain the previous month as the U.S. housing crisis chilled economic activity and pinched consumers. * The Commerce Department said that personal income was up 0.3 percent in March, slightly under forecasts for a 0.4 percent rise and after a 0.5 percent February gain. * But adjusted for inflation, income stagnated after increasing by 0.3 percent in February.

COMMENTS:

ANDREW RICHMAN, MANAGING DIRECTOR, SUNTRUST'S PERSONAL ASSET MANAGEMENT DIVISION, WEST PALM BEACH, FLORIDA:

"Treasuries are rallying on the news that claims were a little bit worse than expected."

"The report certainly does indicate the job market is weaker, though that is not much of a surprise. There have been mass layoffs, especially on Wall Street."

ADAM YORK, ECONOMIC ANALYST, WACHOVIA SECURITIES, CHARLOTTE, NORTH CAROLINA:

PERSONAL SPENDING:

"PCE ticked back up a little but with the core at 2.1 (percent) we are just above the Fed's 2 percent implied ceiling. But clearly the Fed is not primarily concerned with inflation right now, the statement made that fairly clear yesterday. The are trying to talk about inflation more than they have in previous months but they are still worried about problems in financial markets and they are still worried about growth. They think that slower growth will naturally lower inflation.

JOBLESS CLAIMS:

"In some ways the jobless claims are a return to the higher trend numbers that we have been seeing. We had gotten a one-week reprieve last week but it looks like we are still going to have elevated jobless claims numbers here for a while. The labor market is going to have some weakness this year and we expect non-farm payrolls losses on average for the rest of the year."

RICHARD DEKASER, CHIEF ECONOMIST, NATIONAL CITY CORP., CLEVELAND:

JOBLESS CLAIMS: "After seeing an improvement trend much of April, the sudden deterioration at the end of the month is certainly disappointing."

"The overall assessment of the labor market is weak and this latest number doesn't change that assessment."

PERSONAL INCOME/SPENDING: "This tells us we are ending the quarter on a relatively up note. This portends we could see better consumption pattern in the second quarter. I'm expecting the rebate checks to help spending."

"The consumer sector still remains under tremendous stress from the labor market and commodities market. We are seeing spending gains despite the very weak confidence readings."

OMER ESINER, MARKET ANALYST, RUESCH INTERNATIONAL, WASHINGTON:

"Consumption looks decent, personal income is in line with expectations, the core PCE has inched up slightly but still within recent ranges and finally there is a relatively steep jump in jobless claims. Also concerning is the fact that continuing claims have risen back above the 3 million mark. On balance I don't see much of an impact on the dollar from this morning's data particularly ahead of the ISM figures due out shortly and tomorrow's employment report."

MARKET REACTION: * BONDS: U.S. Treasury debt prices pare losses. * CURRENCIES: U.S. dollar extends gains against euro. * STOCKS: Dow and S&P stock index futures briefly turn negative. * RATE FUTURES: U.S. short-term interest rate futures extend gains, point to 28 percent chance of June rate cut.