Initial jobless claims are up 9,000 to 224,000 in the week ending January 27 after a negligible upward revision to 215,000 in the prior week. The increase is above the consensus of 214,000 in the Econoday survey of forecasters. The four-week moving average is up 5,250 to 207,750 in the January 27 week. The January 27 seasonally adjusted level is in line with the 11,082 rise in unadjusted claims to 261,029, although seasonal factors anticipated no change. Some post-holiday layoffs may have occurred later this January as businesses are uncertain about the labor needs at the moment in anticipation of slower economic growth.

Insured jobless claims are up 70,000 to 1.898 million in the January 20 week, an increase fairly typical of mid-January when the unemployment rolls normally swell with layoffs of seasonal workers and as businesses adjust payrolls usually to cuts costs -- in preparation for a new year. The insured rate of unemployment is up a tenth to 1.3 percent in the January 20 week. The increase in the unemployment rate is small but could be a signal of a little more easing in the supply of labor.

Jobless claims for the January 28 week are expected to come in unchanged at 214,000.

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.