Initial jobless are down 10,000 to 230,000 in the August 19 week after a negligible upward revision to 240,000 in the prior week. The current week level is below the consensus of 241,000 in the Econoday survey of forecasters. The four-week moving average is up 2,250 to 236,750 in the August 19 week. The number of new filings for unemployment benefits has faded after the pop higher to 250,000 in the August 5 week. New claims remain consistent with a labor market well able to absorb unemployed workers.

Insured unemployment claims dipped 9,000 to 1.702 million in the August 12 week, a small decrease that does not change the picture for underlying conditions. The four-week moving average is up 5,750 to 1.697 million for the August 12 week, a level that is not materially different from the most recent week.

The insured rate of unemployment is down a tenth to 1.1 percent in the August 12 week. The insured unemployment rate has varied little since early April. It has only exceeded a range of 1.1 to 1.2 percent with a brief increase to 1.3 in the July 8 week. For those workers eligible for unemployment benefits, the labor market is exceptionally tight.

Jobless claims for the August 19 week are expected to come in steady at 241,000 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.