Merk Investments: Jobless Claims

Initial jobless claims for the week ending 13 September increased to 455K vs. the 440K posted during the previous week. The four-week average increased to 445K and continuing claims, which are released with a one-week lag fell to 3.478mln down from a revised 3.533mln.

The data suggest that labor market conditions continue to deteriorate and the rate of unemployment should remain elevated during the upcoming non-farm payroll-reporting period. Given the current credit panic, large expected layoffs in the financial industry and the expected layoffs associated with this portion of the business cycle we expect the rate of unemployment to continue climbing. More importantly, ongoing culling of the labor force suggests that the rate of personal consumption, which comprises nearly seventy percent of gross domestic product, should see retrenchment over the final two quarters of the year.

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 September 13