Merk Economics Release-Jobless Claims: Week Ending August 30

The initial jobless claims series for the week ending August 30 climbed to 444k vs. the revised 429K (425k previous). The four-week moving average fell to 438K and the continuing claims series, which is released with a one-week lag saw a modest increase to 3.435mln.

This morning’s employment numbers continue to indicate that the labor sector remains soft at best and looks to continue to shed jobs throughout the remainder of the year. With jobless claims increasing and the ADP survey of private sector hiring signaling another month of job losses, we are quite comfortable with our -75K forecast ahead of the August non-farm payroll data to be published August 5. Although the ADP data did indicate a modest increase in service sector hiring, the continuing losses in the goods producing and manufacturing sector look to outweigh any late summer gains in hiring linked to the leisure and hospitality sector.

Given the steady upward march in continuing claims and further losses across the broad spectrum of the economy, we expect the rate of unemployment to rise to 5.8% in August and move towards 6.2% early in 2009.

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: Week Ending August 30