Initial jobless claims fell 16,000 to 230,000 in the week ended April 22, at the low end of Econoday's forecasting range of 230,000 to 250,000, nearly erasing the previous two weeks of increases totaling 18,000. The four-week moving average moved down to 236,000 from 240,000.

The level of insured unemployment claims approved claims for eligible workers edged down 3,000 to 1.858 million after increasing 57,000 the previous week, leaving the insured rate of unemployment at 1.3 percent for the second consecutive week.

With today's data showing the labor market remains resilient after two weeks of claims increases, the Federal Reserve still has some way to go before it can feel reassured it is winning its fight against inflation. That being said, the advance estimate of the first quarter GDP was much weaker than expected at 1.1 percent compared to Econoday's consensus of 2.0 percent.

Having steadily risen, jobless claims for the April 22 week are expected to come in at 249,000 versus 245,000 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.