Initial jobless claims are up 12,000 to 248,000 in the week ending July 1 after a small downward revision to 236,000 in the prior week. The increase is not far from the consensus of 245,000 in the Econoday survey of forecasters. The four-week moving average is down 3,500 to 253,250 in the week.

While the current report has a move higher in the number of claims filed, it remains below the more elevated readings in the three weeks of June 3, 10, and 17. Some of these workers may be in the retail sector as Bed Bath and Beyond shuttered their last retail locations.

Insured jobless claims are down 13,000 in the week ending June 24 to 1.720 million after 1.733 million in the prior week. The four-week moving average is down 8,750 to 1.747 million from 1.755 million in the June 17 week. These are small changes week-to-week and suggest that the level of recipients of benefits is fairly stable and workers may not be coming off the unemployment rolls as quickly. The insured rate of unemployment is 1.2 percent where it has been for the past 10 weeks.

Jobless claims for the July 6 week are expected to come in at 245,000 versus 239,000 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.