He told Sky Sports that James - who enjoyed a fast start to life at United - needs to be dropped.
Merson said, “With Manchester United, you're talking about one of the biggest clubs in the world not having a centre forward.
“They're playing with Daniel James up front, who sooner or later has to be taken out of the team. You feel sorry for the lad, now. He looks a bit lost if I'm honest - he needs a break.
“He's playing all the time but his game is based on sheer pace. It won't bring you much alone in the Premier League, and I feel for him.
“He needs to be brought out of the team but they've haven't got anyone to bring in for him."