Initial jobless claims increased 13,000 in the November 11 week to 231,000, the highest level since the August 19 week, topping the 222,000 consensus forecast in an Econoday survey. The 4-week average rose to 220,250 from 212,500, marking the fourth consecutive gain.

Continuing claims in lagging data for the November 4 week rose 32,000 to 1.865 million, the highest level since the week ended November 27, 2021 and marking the eighth consecutive week of increase. The advance lifted the unemployment rate for insured workers from 1.2 to 1.3 percent, a level not seen since the April 15 week. Since that week, the unemployment rate had been contained within a tight range of 1.1 percent to 1.2 percent.

Today's data suggest conditions in the labor market might be cooling and come on the back of a set of lower-than-expected inflation figures, which together should lower expectations of further rate hikes.

Jobless claims for the November 11 week are expected to come in at 222,000 versus 217,000 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.