INSTANT VIEW: Jobless claims drop in latest week

NEW YORK (Reuters) - The number of U.S. workers filing new claims for jobless benefits fell sharply last week to the lowest level since January, but the seasonally adjusted data was again distorted by an unusual pattern of automotive industry layoffs that amplified the drop.

KEY POINTS: * Initial claims for state unemployment insurance fell 47,000 to a lower-than-expected seasonally adjusted 522,000 in the week ended July 11, the Labour Department said on Thursday. * Analysts polled by Reuters had forecast claims to be unchanged at 565,000 last week. * A Labour Department official said that far fewer layoffs than anticipated based on past experience in the automotive sector and elsewhere in manufacturing accounted for both the large drop in seasonally adjusted claims last week and in the very steep decline in so-called continued claims.

COMMENTS:

DOUG ROBERTS, CHIEF INVESTMENT STRATEGIST, CHANNEL CAPITAL RESEARCH, SHREWSBURY, NEW JERSEY:

"Probably the whole thing is a bottom but that doesn't necessarily lead to a bounce. The focus may shift to what type of a recovery we're going to have. They're saying that unemployment may continue to rise. My belief is that it'll be more of a U-shaped recovery, until they actually start pumping more stimulus into the economy people may not even notice it. But we're clearly bottoming, we're clearly stabilizing -- the question is what do you do for the second act. That's what everybody's shifting to right now.

"When you look at futures, you saw them back off right before, then they rose, and then people started thinking about it and now they're back to where they were. With the initial claims numbers, one of the things that people are wondering, is it due to the fact that with all the layoffs in the auto industry? How much of that was simply because stuff that would've been done now was done earlier? So it's kind of a seasonal adjustment -- but we won't know about that until we see more data. Ultimately initial claims are more volatile for that reason, so people are going to be focussing more on the next employment report.

"Looking ahead to what kind of recovery we're going to see, people are looking at three things. Number one is earnings, number two is employment, and number three is the stimulus. The foremost of those is earnings."

BORIS SCHLOSSBERG, DIRECTOR OF FX RESEARCH, GFT, NEW YORK:

"The jobless claims numbers are very healthy. We've seen a pretty strong response from the risk currencies, which have been up since the release of the JP Morgan results. The whole recovery theme is positive for the risk environment at the moment."