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INSTANT VIEW 6-U.S. jobless claims fall to lowest in 4-1/2 years

NEW YORK, Oct 11 (Reuters) - The number of Americans filing new claims for unemployment benefits fell sharply last week to the lowest level in more than four and a half years, according government data on Thursday that suggested improvement in the labor market.

STORY: TABLE COMMENTS:

DOUG BRAIN, ECONOMIST, STONE & MCCARTHY RESEARCH ASSOCIATES, PRINCETON, NEW JERSEY

"In the last few weeks there was a lot of upward pressure in new claims due to the start of the new fiscal year when state governments had layoffs because they were starting new, more austere budgets. Now there is kind of a relief of this pressure so claims fell. That fall was amplified by the fact that it's the start of a new quarter and typically people filing for unemployment insurance will wait until the start of a new quarter to file their claims because in times of wage inflation, their insurance payments would be higher. But this year that was less of a factor than it normally is so the seasonal adjustment factor amplified the downward pressure on claims."

MICHAEL MORAN, CHIEF ECONOMIST, DAIWA SECURITIES AMERICA, NEW YORK

"I would not get excited about the jobless drop. It's a very large change and a low level but I suspect some kind of special factor was involved. One suggestion was that most of the decline came from one state, which suggests a problem with data collection was involved.

"The trade numbers showed a little bit of widening in the trade deficit. It looks like net exports will contribute negatively to GDP growth, subtracting as much as a half a percentage point from GDP growth."

DAVID SLOAN, ECONOMIST, 4CAST LTD, NEW YORK

"There was a big surprise in the fall. It was probably partly erratic and assisted by seasonal adjustments, given the fall we have had in the unemployment rate. It does seem like there is something going on maybe in the labor market. The Labor Department said most of the fall came in one state. The numbers are probably exaggerating the scale of the labor market improvement, but it does seem that there is something going on.

"Import prices were a little higher than expected and last month was upwardly revised. The higher import prices are contributing to a wider trade deficit, but also export numbers were a bit disappointing."

BRIAN KIM, CURRENCY STRATEGIST, RBS SECURITIES, STAMFORD, CONNECTICUT

"This is a positive signal for the economy. The overall trend seems to be that the labor market is improving."

PETER CARDILLO, CHIEF MARKET ECONOMIST, ROCKWELL GLOBAL CAPITAL, NEW YORK

"This is a lot better-than-expected. It's a number that is somewhat of a surprise and the market is going to react positively. It shows the trend that the labor market is slightly improving."

JORDAN WAXMAN, MANAGING DIRECTOR AND PARTNER AT HIGHTOWER IN NEW YORK

"Claims looked pretty strong, definitely a big drop down. We're starting to hear noise about companies hiring, and that's what the market is waiting for. Without labor market improvement, we can't get a sustainable rally. The numbers seem to be moving in the right direction."

MARKET REACTION:

STOCKS: U.S. stock index futures added to their gains

BONDS: U.S. Treasury debt prices added to their losses .

FOREX: The dollar extended its gains against the yen, hitting session highs .

(Americas Economics and Markets Desk; +1-646 223-6300)

Keywords: USA ECONOMY/JOBLESS CLAIMS