Merk Investments: Jobless Claims

Initial claims for the week ending 21 June held steady against a upwardly revised 384K posted for the previous week. A look at the four-week moving average indicates that it advanced to 378K and continuing claims, which are released with a one-week lag, increased to 3.139 million or 2.7% for the week.

We think that the labor market will begin to incorporate those displaced by the floods in the upper Midwest and may skew a bit higher over the next few weeks. The initial claims data that will be included in the estimate of the unemployment rate for June supports our forecast of 5.4%. The claims series should continue to bounce in a range between 360-390K with the risk decisively poised to the upside. We would not be surprised to see claims bounce above 400K.

Joseph Brusuelas
Merk Investments
Chief Economist/VP Global Strategy

This report was prepared by Merk Investments LLC, and reflects the current opinion of the author.  It is based upon sources and data believed to be accurate and reliable.  Opinions and forward looking statements expressed are subject to change without notice.  This information does not constitute a solicitation or an offer to buy or sell any investment product, nor provide investment advice. Merk Investments does not own any of the stocks mentioned; this is not an offer to buy or sell any security mentioned.