Initial claims edged up 1,000 in the December 2 week to 220,000, roughly in line with Econoday's 222,000 consensus. The four-week average was nearly unchanged at 220,750, compared with 220,250 the previous week.

Continuing claims fell 64,000 to 1.861 million in lagging data for the November 25 week, partly offsetting the 84,000 increase recorded the previous week. This was the largest weekly drop since the July 15 week. Still, the four-week moving average rose 7,000 to 1.872 million, the highest level since the week ended December 11, 2021. The unemployment rate for insured workers edged down a tenth to 1.2 percent after a brief increase to 1.3 percent the previous week.

Jobless claims for the December 2 week are expected to come in at 222,000 versus 218,000 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.