Initial jobless claims are up 6,000 to 227,000 in the July 29 week after an unrevised 221,000 in the prior week. The level is not meaningfully different from the consensus of 225,000 in the Econoday survey of forecasters. The four-week moving average is down 5,500 to 228,250 in the July 29 week.

Seasonal adjustment of claims data can be tricky in the early weeks of July and then settle down in the second half of the month. The underlying trend seems to be for claims in the low 200,000's which is consistent with a tight labor market.

Insured jobless claims are up 21,000 to 1.700 million in the July 22 week. The four-week moving average is down 4,500 to 1.712 million which suggests that the number of persons receiving unemployment benefits is stable at current levels. The insured rate of unemployment is unchanged at 1.1 percent in the July 22 week from the prior week. It remains just above historic lows. At least for those eligible for unemployment benefits, unemployment remains unusually low.

Jobless claims for the July 30 week are expected to come in at 225,000 versus 221,000 in the prior week. Claims have been moving lower in recent weeks.

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.