Merk Economics Release-Jobless Claims

Initial claims for the week ending August 9 arrived well above the 435K-consensus print expected by the market. Claims arrived at 450K, down from a revised 460K (previous 455K) posted previously. The four-week moving average jumped to 440K and continuing claims, which are released with a one-week lag, jumped 3.5% to 3.417mln.

The claims data strongly suggests that the August non-farm payroll will see material deterioration that will see both the establishment survey and household surveys provide visible evidence of continuing weakness in the labor sector.

While the extension of jobless claims benefits has had some impact on the headline, we think that dismissing the increase in overall unemployment is not prudent. Evaluating the data in the labor sector it is quite clear that jobs have become less plentiful and the sales environment in the August reporting period may end up being a bit weaker than the market is currently pricing in.

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.

Merk Investments: Jobless Claims