Initial jobless claims are up 12,000 to 218,000 in the week ending December 23 after a negligible upward revision to 206,000 in the prior week. The December 23 level is above the consensus of 210,000 in the Econoday survey of forecasters. Seasonal adjustment factors had anticipated a rise in claims, but the increase of 31,570 to 272,610 in the week was larger than anticipated. Nonetheless, the underlying pace of filings for jobless benefits remains consistent with modest numbers. The four-week moving average is down a scant 250 to 212,000 in the December 23 week.

The level of insured jobless claims are up a small 14,000 to 1.875 million in the December 16 week after 1.861 million in the prior week. The four-week moving average is down 12,500 to 1.865 million after 1.877 million in the prior week. The insured rate of unemployment is up a tenth to 1.3 percent in the December 16 week. Among those eligible for unemployment benefits, the rate of unemployment remains at low levels with only minor fluctuations week-to-week and is consistent with a tight labor market.

Jobless claims for the December 23 week are expected to come in at 210,000 versus 205,000 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.