INSTANT VIEW: Q2 GDP and weekly jobless claims

NEW YORK (Reuters) - The U.S. economy expanded at a stronger-than-first-reported 3.3 percent annual rate in the second quarter, as consumer spending and net exports were more robust than initially estimated and inventories fell less sharply, a government report showed on Thursday.

JOBLESS CLAIMS: The number of U.S. workers filing new claims for jobless benefits fell by 10,000 last week, government data on Thursday showed, but remained at elevated levels indicating a weak labor market.

KEY POINTS:

GDP: * Gross Domestic Product or GDP for the April-June period was first reported as growing at a 1.9 percent rate. Analysts polled by Reuters were expecting the annual rate to be revised to 2.7 percent.

* GDP grew at a sluggish 0.9 percent rate in the first quarter after a 0.2 percent contraction in the final three months of 2007. The fourth quarter of last year was the weakest since July-September 2001, when the economy was in recession.

* Consumer spending, which fuels two-thirds of the U.S. economy, grew at an upwardly revised 1.7 percent rate rather than the 1.5 percent pace first reported.

* Exports grew at a 13.2 percent annual rate instead of the 9.2 percent pace initially estimated.

JOBLESS CLAIMS:

* Initial claims for state unemployment insurance benefits declined to a seasonally adjusted 425,000 in the week ended Aug 23 from a revised 435,000 the prior week, the Labor Department said. It was the lowest reading since the week of July 19.

* Analysts polled by Reuters had forecast 428,000 new claims versus a previously reported count of 432,000 the prior week. A Labor Department official said there were no special factors influencing the latest data.

COMMENTS:

MICHAEL ENGLUND, CHIEF ECONOMIST, ACTION ECONOMICS, BOULDER, COLORADO:

"Basically nothing but upside surprises outside of the one that had been expected, the big driver being trade."

"I think what it does mean is that some of the highly confident assertions about where the economy was going in February, March and April proved completely wrong. I think it's clear that the second quarter not only wasn't a recession quarter, it was actually a very robust quarter."

DUSTIN REID, SENIOR CURRENCY STRATEGIST, ABN AMRO, CHICAGO:

"The numbers are a bit better than expected on the headlines. Claims were in line, but GDP number is revised higher than expected I think it shows the U.S. economy in general is performing at a better level than what people probably expected two or three months ago and the U.S has the potential to lead global growth in the second half of the year."

GARY POLLACK, HEAD OF FIXED-INCOME TRADING, DEUTSCHE BANK PRIVATE BANKING, NEW YORK:

"GDP came in stronger than what the market was looking for. This is positive for the equity markets and anything positive for equity is generally negative for bonds."

ON JOBLESS CLAIMS:

"Jobless claims fell and the continuing claims rose so those two things offset each other. It's a mixed result. The outlook for the economy is still bleak as consumer confidence remains low and the housing market is still grinding lower."

"The outlook for third quarter GDP is less than 1 percent, so I still have a negative outlook."

JIM AWAD, CHAIRMAN, W.P. STEWART & CO. LTD., NEW YORK:

"The market is gaining increasing confidence the strain in the financial markets and high oil prices will not tip the economy into a recession."

"You are getting a lift in stock futures and the dollar in spite of a rise in oil."

"We are at month-end. People are looking at the glass half-full. They want their portfolios to look as good as possible."

MARKET REACTION:

STOCKS: U.S. equity index futures rise

BONDS: U.S. Treasury prices extend losses

DOLLAR: U.S. dollar pares losses

RATE FUTURES: Fed fund futures show increased prospects for rate hikes

RELATED LINKS * GDP poll story