Initial jobless claims rose 22,000 to 264,000 in the week ending May 6 after an unrevised 242,000 in the prior week. The Labor Department noted this is the highest level since 264,000 in the October 30, 2021 week. The four-week moving average is up 6,000 to 245,250 in the May 6 week, and the highest since 249,250 in the November 20, 2021 week. While the increase is not immediately alarming one week does not make a trend it suggests that the tightness in the labor market is easing further.

Insured jobless claims are up 12,000 to 1.813 million in the April 29 week and the four-week moving average is up 2,250 to 1.830 million. These are relatively small moves that do not change the underlying picture of a labor market where workers are not remaining on the unemployment rolls for extended periods. The insured rate of unemployment remains at 1.2 percent in the April 29 week. At least among workers eligible for unemployment benefits, the labor market remains tight.

Jobless claims for the May 6 week are expected to come in at 245,000 versus 242,000 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.