Initial jobless claims are down 18,000 to 228,000 in the April 1 week after dipping 1,000 to 246,000 in the March 25 week. The level is above the consensus expectation of 201,000 in an Econoday survey. The change reflects annual revisions for seasonal adjustment factors. Although higher than anticipated, the level of claims continues to be low in the overall historical context while showing that the pace of layoffs has picked up in the near term. The seasonally adjusted level was close to 228,250 in the four-week moving average which points to a consistent underlying trend.

Insured jobless claims are up a scant 6,000 to 1.823 million in the March 25 week after a revised 1.817 million in the prior week. The four-week moving average rose 10,500 in the week to 1.804 million and suggests that some are remaining on the unemployment rolls for longer. The insured rate of unemployment remains at 1.3 percent for the second week and is a little above the recent trend range of 1.1 percent to 1.2 percent. Unemployment is a bit higher among those eligible for unemployment benefits.

Jobless claims for the April 1 week are expected to come in at 201,000 versus 198,000 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.