Merk Investments: Jobless Claims
Initial claims for the week ending 14 June increased to 381K on the back of a revised 386k (384K previously) posted previously. The four week moving average for initial claims rose to 375K, up from 314K one year ago. Initial claims, which are released with a one-week lag, fell to 3.060mln.
The data suggest that the labor sector continues on a pace of modest deterioration with the unemployment remaining elevated. The slow and steady creep of the four-week moving average inside the claims series does not imply at this point that the claims series will see a positive correction in the aftermath of the settlement of the American Axel strike. As firms attempt to hold down costs in the face of rising prices for inputs, they may be tempted to begin to furlough workers in greater numbers than has been the case thus far through the economic slowdown to protect profit margins and prevent an outsized pass through of higher prices to consumers. Stay tuned.
Joseph Brusuelas
Merk Investments
Chief Economist/VP Global Strategy
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