Initial jobless claims are little changed in the September 30 week at up 2,000 to 207,000 following a negligible revision higher to 205,000 in the prior week. The level is a bit below the consensus of 210,000 in the Econoday survey of forecasters. The level of unadjusted new claims of 172,775 is roughly in line with seasonal adjustment factors. The four-week moving average is down 2,500 to 208,750 in the September 30 week which suggests that claims are settling into a trend level in the low 200,000's that is consistent with a tight labor market.

The number of insured claims is essentially unchanged at down 1,000 to 1.664 million in the September 23 week. Unadjusted insured claims are down 10,581 to 1.5778 in the week. The four-week moving average is down 5,000 to 1.668 million in the September 23 week and points to stability in the rolls of those receiving benefits as approved claims arrive and existing claims end due to recipients finding jobs or timing out of benefits.

The insured rate of unemployment remains at 1.1 percent in the September 23 week, and for the fifth week in a row. For those eligible for unemployment benefits, the rate reflects a labor market able to reemploy quickly workers experiencing job separations.

Jobless claims for the October 21 week are expected to come in at 210,000 versus 204,000 in the prior week. Claims have moved noticeably 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.