We continue to get a barrage of economic data, most of which continues to point to a troubled environment. Initial jobless claims popped to 637,000 from 605,000 in the previous week. That was well above the 610,000 level that was forecast.
More importantly, people who lose their jobs continue to have trouble finding new work. Continuing claims surged to 6.56 million from 6.358 million a week earlier. That was well above the 6.4 million forecast and a fresh all-time high. The chart above sure does speak volumes, doesn’t it?
Meanwhile, the Producer Price Index gained 0.3% on the month. The core PPI rose 0.1%, in line with expectations. At the intermediate stage of production, prices fell 0.5% on the headline and 0.9% on the core. Crude goods rose 3% in price, though the core crude index fell 0.6%.
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Wow – Thank you for your analysis.
Do you think the Fed will monetize more debt and try to keep interest rates low? If they do, do you think they will be successful at keeping interest rates low?
Or, do you think they will allow interest rates to climb?
I am very uncertain right now. The markets seem to be moving powerfully toward more deflation, but at the same time the Government is doing everything in it’s power to inflate. Will the inflation push gold up even while the DOW falls? Will the falling DOW strengthen the dollar and thus push gold lower? Right now I’m moving to cash.
Thanks and God bless.
Is it time to sell inverse bond funds? What levels should we watch before selling?
Thanks