The number of Americans filing new claims for unemployment benefits unexpectedly fell to its lowest since the early days of the 2007-09 recession, a hopeful sign for the sluggish labor market.

Initial claims for state unemployment benefits fell 5,000 to a seasonally adjusted 330,000, the lowest level since January 2008, the Labor Department said on Thursday.

COMMENTS:

MICHAEL STRAUSS, CHIEF ECONOMIST, COMMONFUND, WILTON,

CONNECTICUT:

"A very simple thing, the economy's doing better. So that's the first stage. There are times, and I do think that's the bigger story. Though, that claims can be a little bit distorted at the start of the year.

"So that could make them a little bit lower, but I think the biggest thing is, very simple, it's the economy. The economy is structurally doing a little bit better. Now, it may not show up in the first print of GDP for the fourth quarter.

HUGH JOHNSON, CHIEF INVESTMENT OFFICER OF HUGH JOHNSON ADVISORS LLC IN ALBANY, NY:

"The claims numbers are clearly a big surprise and were very good numbers. Most of us after last week had been expecting some sort of an increase from the 335000 in the prior week. But this was a big surprise, we saw an ongoing decline in claims - a big surprise and a very good surprise.

"Claims are an important component of the index of leading economic indicators and tell us where employment is going and these numbers imply that we may get a good employment number for the month of January when it is released in early February.

You don't know for sure because the statistical correlation is not precise, but they imply we may have a good employment number for the month of January."

JOHN CANALLY, ECONOMIST/INVESTMENT STRATEGIST, LPL FINANCIAL, BOSTON:

"I love to say it's an improvement. Early part of the year you tend get these distortions. You have to take it with a grain of salt. You have to expect a rise in claims in the second half of January. But it's moving in the right direction. This is telling us the labor market is improving slightly."

ANDREW GRANTHAM, ECONOMIST, CIBC WORLD MARKETS, TORONTO:

"The latest figures are a positive indicator that net employment growth could have accelerated in next week's payroll figures, although at this stage hiring rather than firing is the main determinant of payroll growth. The better than expected data should be beneficial to stocks, and weigh on fixed income."

STEPHEN STANLEY, CHIEF ECONOMIST, PIERPONT SECURITIES, STAMFORD, CONNECTICUT:

"This is mostly noise not a signal. The move last week and this week are biased on the low side due to seasonal factors. They will likely pop back up. I don't think the labor market has improved much because other indicators haven't shown hirings picking up. The jobs market is just treading water at this point."

JOSEPH TREVISANI, CHIEF MARKET STRATEGIST, WORLDWIDEMARKETS, WOODCLIFF LAKE, NEW JERSEY:

"The two week improvement in initial claims is not yet a trend but it may reflect a better, less partisian atmosphere in Washington and the lack of drama over the debt limit increase and employers more willing to plan for the future."

MARKET REACTION: BONDS: U.S. bond prices pared gains

FOREX: The dollar extended gains versus yen, climbing to a session peak of 89.80 yen and was last at 89.74, up 1.3 percent on the day.

GRAPHIC: Jobless claims graphic - U.S. jobless claims: New claims for unemployment fell last week to 330,000 - the lowest since January 2008. For the week ended January 12, continuing claims fell to 3.16 million. http://link.reuters.com/xew34t

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