Initial jobless claims rose 4,000 to 229,000 in the week ending May 20 after a substantial downward revision to 225,000 in the prior week (previously 242,000). The Labor Department did not provide an explanation for the unusually large revision. The May 20 week level is well below the Econoday consensus of 248,000. The four-week moving average is unchanged at 231,750 in the May 20 week, close to the week-over-week level.

Last week's report hinted that joblesss claims might be on an upswing, but the revision erases that signal. So far new claims for benefits remain at levels consistent with modest economic expansion and low levels of job separations.

Insured jobless claims are down a scant 5,000 to 1.794 million in the May 13 week after 1.799 million in the prior week. The four-week moving average is down 12,250 to 1.800 million in the May 13 week. The insured rate of unemployment is at 1.2 percent for the fourth week in a row.

Taken together, the data point to stable conditions for job losses and insured benefits. Fed policymakers will not see any deterioration in the labor market in the recent weekly numbers.

Jobless claims for the May 20 week are expected to rise 6,000 to 248,000 following a 22,000 swing lower to 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.