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

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NEW YORK, Oct 11 (Reuters) - The number of Americans filingnew claims for unemployment benefits fell sharply last week tothe lowest level in more than four and a half years, accordinggovernment data on Thursday that suggested improvement in thelabor 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 innew claims due to the start of the new fiscal year when stategovernments had layoffs because they were starting new, moreaustere budgets. Now there is kind of a relief of this pressureso claims fell. That fall was amplified by the fact that it'sthe start of a new quarter and typically people filing forunemployment insurance will wait until the start of a newquarter to file their claims because in times of wage inflation,their insurance payments would be higher. But this year that wasless of a factor than it normally is so the seasonal adjustmentfactor 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 verylarge change and a low level but I suspect some kind of specialfactor was involved. One suggestion was that most of the declinecame from one state, which suggests a problem with datacollection was involved.

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

DAVID SLOAN, ECONOMIST, 4CAST LTD, NEW YORK

"There was a big surprise in the fall. It was probablypartly erratic and assisted by seasonal adjustments, given thefall we have had in the unemployment rate. It does seem likethere is something going on maybe in the labor market. The LaborDepartment said most of the fall came in one state. The numbersare probably exaggerating the scale of the labor marketimprovement, but it does seem that there is something going on.

"Import prices were a little higher than expected and lastmonth was upwardly revised. The higher import prices arecontributing to a wider trade deficit, but also export numberswere a bit disappointing."

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

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

PETER CARDILLO, CHIEF MARKET ECONOMIST, ROCKWELL GLOBALCAPITAL, NEW YORK

"This is a lot better-than-expected. It's a number that issomewhat of a surprise and the market is going to reactpositively. It shows the trend that the labor market is slightlyimproving."

JORDAN WAXMAN, MANAGING DIRECTOR AND PARTNER AT HIGHTOWER INNEW YORK

"Claims looked pretty strong, definitely a big drop down.We're starting to hear noise about companies hiring, and that'swhat the market is waiting for. Without labor marketimprovement, we can't get a sustainable rally. The numbers seemto 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