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(Corrects final two paragraphs to show most recent layoffs data)
* U.S. jobless claims rise 38,000 in latest week
* Personal income jumps most in eight years
* Much of income gains came from temporary factors
By Jason Lange
WASHINGTON, Jan 31 (Reuters) - The number of Americans filing new claims for unemployment benefits last week stayed in a range consistent with job growth and incomes rose in December by the most in eight years, mildly positive signs for a still-fragile economy.
The data suggests points to some underlying momentum in the economy despite a surprise contraction in gross domestic product during the fourth quarter, which largely came from temporary factors.
Last week, initial claims for state unemployment benefits increased 38,000 to 368,000, the Labor Department said on Thursday.
The increase follows a week where new claims were at their lowest in five years and still points to an economy where employers are adding jobs, albeit at a lackluster pace.
"It's still consistent with modest employment growth," said Sam Bullard, an economist at Wells Fargo Securities in Charlotte, North Carolina.
Economists polled by Reuters had expected claims to increase to 350,000.
Claims have been very volatile this month, dropping sharply in the week ended Jan. 12 and maintaining the trend in the following week. That was largely because the model used by the department to smooth out the seasonal variations has been unusually generous during the first three weeks of January.
The four-week moving average for new claims, a better measure of labor market trends, gained 250 to 352,000, suggesting a steady improvement in labor market conditions.
Last week's claims data has no bearing on January's employment report, which is scheduled for release on Friday, as it falls outside the survey period.
Prices for U.S. 30-year Treasuries pared gains, while S&P 500 futures, which were flat to negative before the data, rose a little.
Employers are expected to have added 160,000 jobs to their payrolls in January after an increase of 155,000 in December. The unemployment rate is seen holding steady at 7.8 percent.
In a separate report, the Commerce Department said American incomes rose 2.6 percent last month. That was the biggest increase since December 2004 and well above analysts' expectations for a 0.8 percent gain.
However, much of the increases in personal incomes over the last two months have been due to special dividends and accelerated bonuses to beat tax increases that were due to begin this month.
The big rise in incomes suggests total consumer spending power entered the new year on a stronger footing, even if the gains may not have been distributed evenly throughout the workforce.
The economy faces the threat of across-the-board spending cuts scheduled for March, as well as the possibility the government might default later this later year and trigger another recession.
After-tax income climbed 2.7 percent in December, the strongest since May 2008, while consumer spending rose 0.2 percent, just below the pace expected by analysts in a Reuters poll.
Excluding the one-time factors that boosted incomes in December, after-tax income rose 0.4 percent.
The number of planned layoffs at U.S. firms rose in January from the prior month, but declined from a year earlier, another report showed on Thursday.
Employers announced 40,430 job cuts this month, up 24.2 percent from 32,556 in December, according to the report from consultants Challenger, Gray & Christmas, Inc. Layoffs were down 24.4 percent from January 2012. (Additional reporting by Richard Leong in New York; Editing by Neil Stempleman)