INSTANT VIEW: U.S. continuing jobless claims at record

NEW YORK (Reuters) - The number of U.S. workers continuing to claim jobless benefits jumped to a record high in the first week of February, the Labor Department data showed on Thursday, while new claims for unemployment insurance were unchanged at a very high level.

U.S. producer prices rose faster than expected in January after falling for five straight months as energy costs rebounded, government data showed on Thursday, but inflation pressures generally remained benign.

KEY POINTS:

JOBLESS CLAIMS: * The number of people remaining on the benefits rolls after drawing an initial week of aid surged 170,000 to 4.987 million in the week ended Feb 7, the most recent week for which the data is available. That was the highest reading on records dating back to 1967. * Analysts had estimated so-called continued claims would be 4.86 million from a previously reported 4.81 million the prior week. * Initial claims for state unemployment insurance benefits were a seasonally adjusted 627,000 in the week ended February 14 unchanged from an upwardly revised 627,000 the previous week. * New claims hovered close to a 26-year high. * Analysts polled by Reuters had forecast 620,000 new claims versus a previously reported figure of 623,000 the week before. * The four-week moving average of new jobless claims, a better gauge of underlying labor trends because it irons out week-to-week volatility, rose to 619,000, the highest since 1982, from 608,500 the prior week.

PPI: * The Labor Department said the producer price index rose 0.8 percent in January, rising for the first-time since July, compared to a 1.9 percent drop in December. * Analysts polled by Reuters had forecast a 0.2 percent rise in the overall index. * Compared to the same period last year, the producer price index fell 1 percent, the largest decline since October 2006. * Core producer prices, excluding food and energy costs, rose 0.4 percent in January, also above market expectations for an increase of 0.1 percent. * Core PPI rose 0.2 percent in December. * Compared to the same period a year ago, core producer prices were up 4.2 percent. * Energy prices surged 3.7 percent in January, halting five months of declines. Gasoline prices jumped 15 percent, the biggest increase since November 2007. * Food prices fell 0.4 percent, with declines in diary and meat costs more than offsetting sharp increases in vegetables.

COMMENTS:

CHAD MORGANLANDER, PORTFOLIO MANAGER, STIFEL, NICOLAUS & CO, FLORHAM PARK, NEW JERSEY:

JOBLESS CLAIMS:"The persistent trend in job losses will have a negative feedback loop in the economy. On a short-term basis, you might get a relief rally predicated on the fact that we're oversold. Long term, I'm concerned about economic trends which have deteriorated.

"Consensus views on economic growth in 2009 have to be revised downward."

PPI: "There's a lot of white noise in those numbers. It's difficult to determine a trend. We think we're in a deflationary period and we would certainly keep an eye on deflation. That's the main concern in 2009 and 2010."

CONRAD DEQUADROS, SENIOR ECONOMIST, RDQ ECONOMICS, NEW YORK:

"Obviously another very weak reading on the labor market though that's not a particular surprise. If we look at the trend in jobless claims between the January and February employment survey periods it suggests perhaps a significantly larger decline in payrolls for February than we saw in January.

"I think we would be looking at a decline perhaps well north of 600,000 on payrolls."

ALAN LEVENSON, CHIEF ECONOMIST, T. ROWE PRICE, BALTIMORE:

"We're maintaining a high level of labor market deterioration in February and we're likely to see another 500,000 to 600,000 jobs lost when we see the employment data in a couple of weeks.

"I don't think the data was really unexpected. Elevated jobless claims aren't a surprise.

"We're seeing some stabilization, in terms of the growth rate not getting worse. It's like saying someone's fever has stabilized at 105 degrees. It's stable, but they're not a healthy person. You can say the same thing with production, we stabilized at declines of 2.5 percent, but evidence of that is preliminary. In general I think we're moving toward the pace of maximum contraction in the economy, but evidence for that is only preliminary."

DAVID RESLER, CHIEF ECONOMIST, NOMURA SECURITIES, NEW YORK:

"We're now seeing the effects of the layoffs that were announced earlier in the year that made a lot of headlines, those people are now in fact being laid off and filing for their claims.

"Back in '82 we had a stretch of 13 weeks where we had claims in excess of 600,000. The labor force was 40 percent smaller then, though. If the job market was as comparably bad as it was in '82, these numbers would have to be running consistently around 900,000.

(Unemployment rate) "We've always been coming up just shy of 10 percent (in our models). To the extent there's a transitory benefit of the fiscal stimulus, that makes it less likely we get to it."

KEVIN FLANAGAN, FIXED INCOME STRATEGIST, GLOBAL WEALTH MANAGEMENT, MORGAN STANLEY, PURCHASE, NEW YORK:

"I don't think jobless claims provides any new insight into what is going on in the state of the nation's economy. Labor markets will continue to deteriorate right through mid-year if not even further. We will continue to see claims struggle.

"The PPI report is more a reflection of the fact that we are not seeing the same declines in energy prices as we were in the fall months.

"I wouldn't get excited about core being up 0.4 percent as a sign of stagflation. I think there are some anomalies and that we will be in a deflationary environment for several months.

"Treasuries are essentially unchanged. Once again we are back to supply."

KATHY LIEN, DIRECTOR OF CURRENCY RESEARCH, GFT, NEW YORK:

"We have mixed numbers this morning with inflation stronger than expected but jobless claims and continuing claims still at high levels. What I am worried about is the continuing claims number, because they are just a whisker away from five million Americans having lost their jobs. As for PPI the uptick was foreshadowed by the smaller decline in import prices and despite the rise it won't draw away from the disinflation fears of the Federal Reserve. Not too much action in the dollar following the numbers because they are mixed. The jobs data offsets the surprise inflation data."

MARKET REACTION: STOCKS: U.S. equity index futures pare gains after jobless claims. BONDS: U.S. Treasury debt prices hold losses. DOLLAR: U.S. dollar holds losses versus major rivals.