UPDATE 8-Oil, gasoline fall on East Coast recovery, election uncertainty

* U.S. grants Jones Act waivers to ease East Coast crunch

* Pipelines, NY Harbor operations improving

* U.S. payrolls data beats forecasts

(Recasts, updates throughout)

NEW YORK, Nov 2 (Reuters) - Oil and gasoline futures fell on Friday on signs that disruptions to U.S. East Coast fuel supplies caused by super storm Sandy would ease soon, and on uncertainty about the upcoming U.S. election.

Brent crude headed down for a fifth straight day, shrugging off early optimism from U.S. jobs data that showed employers stepped up hiring in October.

Gasoline futures weakened as oil tankers and pipelines supplying New Jersey and the New York Harbor -- the delivery point for the U.S. contract -- restored more operations that had been roiled by Sandy.

Additional pressure on prices came as the U.S. government temporarily waived Jones Act restrictions on tankers carrying fuel from the Gulf Coast refining hub to the Northeast, increasing the available fleet of ships to make the journey.

The waiver allows foreign tankers to carry fuel to the region, which the Jones Act normally limits to U.S. ships. Spot gasoline prices in the Gulf Coast jumped after the waiver was granted on expectations fuel would begin to move to the East Coast.

Uncertainty about the outcome of the U.S. presidential election on Nov. 6 also weighed on market, tamping enthusiasm from the positive jobs data.

Global oil benchmark Brent hit its lowest level since early August, trading down $1.70 at $106.47 a barrel at 12:37 p.m. EDT (1637 GMT), while U.S. crude gave up $1.95 to trade at $85.14 a barrel.

U.S. RBOB gasoline futures traded down 2 percent to $2.5779 a gallon.

Downbeat euro zone data, showing manufacturing shrank for a 15th month running in October as output and new orders fell, added to the bearish outlook.

Data showing that weak economic growth, high prices and improving vehicle fuel efficiency had pushed down consumption of gasoline and diesel in most of Western Europe over the summer also weighed.

(Reporting by Matthew Robinson in New York; Simon Falush and Alice Bagdhjian in London; Florence Tan in Singapore; Editing by Peter Galloway)