Initial jobless claims are unchanged at 209,000 in the week ending October 7 after a small upward revision to 209,000 in the prior week. The level matched the consensus in the Econoday survey of forecasters. The four-week moving average is down 3,000 to 206,250 in the October 7 week. At present, new fillings for benefits are fairly stable and trending in the low 200,000's which is consistent with a tight labor market.

Insured jobless claims are up 30,000 to 1.702 million in the September 30 week after 1.672 million in the prior week. The increase is likely due to a mismatch in seasonal adjustment factors with unadjusted numbers. Unadjusted insured claims are down 33,373 to 1.552 million in the September 30 week. The four-week moving average of seasonally adjusted unemployment rolls is up only 4,750 to 1.674 million from 1.670 million in the prior week. The underlying trend appears to also be fairly stable as new claims are approved and current claims end with recipients either finding work or timing out of benefits.

The insured rate of unemployment is unchanged at 1.1 percent in the September 30 week and has been there for six weeks in a row. At least among workers eligible for unemployment benefits, unemployment remains just above historic lows.

Jobless claims for the October 8 week are expected to come in at 209,000 versus 207,000 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.