Initial jobless claims for the week ended March 4 increased 21,000 to 211,000, topping expectations that had ranged from 190,000 to 205,000 in an Econoday survey. The weekly increase was the first in 5 weeks and the largest since the October 1, 2022 week.

With claims at their highest level since the December 24, 2022 week and above the 200,000 mark for the first time since mid-January, the four-week average rose 4,000 to 197,000, marking the fourth consecutive advance, more consistent with layoff announcements of the past few weeks.

The level of insured unemployment claims was up 69,000 to 1.718 million in the February 25 week, a level last matched in the December 17, 2022 week. The insured rate of unemployment edged up to 1.2 percent from 1.1 percent.

Jobless claims for the March 4 week are expected to come in at 195,000 versus 190,000 in the prior week.

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.