New claims for jobless benefits are down 3,000 to 183,000 in the week ending January 28 after an unrevised 186,000 in the prior week. The level is below the Econoday survey consensus of 193,000. The four-week moving average is down 5,750 to 191,750 in the January 28 week. It appears that recent big layoff data in the tech sector have yet to reach the unemployment applications process. Or it may be that many of those workers are in categories not eligible for benefits. It is also possible that in a tight labor market, some of those laid off have quickly found other jobs and never needed to file.

Insured claims for unemployment benefits dip 11,000 to 1.655 million in the week ended January 21. This is a small decline that does not change the picture in the historical context of relatively low numbers of people receiving benefits and staying on the rolls for a reasonably short period. The four-week moving average is down 10,500 to 1.652 million in the January 21 week which suggests that the underlying trend is steady. The insured rate of unemployment for those eligible to receive unemployment benefits is 1.1 percent in the January 21 week and unchanged for the fourth week in a row.

The claims data indicate that the labor market remains tight, at least for those who can be approved for unemployment payments.

Jobless claims for the January 28 week are expected to come in at 193,000 versus 186,000 in the prior week which, for the second week in a row, was much lower than expected.

New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smooths out weekly volatility.

Jobless claims are an easy way to gauge the strength of the job market. The fewer people filing for unemployment benefits, the more have jobs, and that tells investors a great deal about the economy. Nearly every job comes with an income that gives a household spending power. Spending greases the wheels of the economy and keeps it growing, so a stronger job market generates a healthier economy.

There's a downside to it, though. Unemployment claims, and therefore the number of job seekers, can fall to such a low level that businesses have a tough time finding new workers. They might have to pay overtime wages to current staff, use higher wages to lure people from other jobs, and in general spend more on labor costs because of a shortage of workers. This leads to wage inflation, which is bad news for the stock and bond markets. Federal Reserve officials are always on the look-out for inflationary pressures.

By tracking the number of jobless claims, investors can gain a sense of how tight, or how loose, the job market is. If wage inflation looks threatening, it's a good bet that interest rates will rise, bond and stock prices will fall, and the only investors in a good mood will be the ones who tracked jobless claims and adjusted their portfolios to anticipate these events.

Just remember, the lower the number of unemployment claims, the stronger the job market, and vice versa.