Jobless claims remain steady and low, indicative of strong demand for labor and posing no threat to restrictive monetary policy. Initial claims fell 1,000 in the March 14 week to a lower-than-expected 209,000 that pulls the 4-week average slightly lower to 208,000, among the lowest readings so far this year.

Continuing claims in lagging data for the March 2 week rose 17,000 to 1.811 million with this 4-week average at 1.799 million which is in line with a steady trend going back to August last year. The unemployment rate for insured workers is unchanged at 1.2 percent as it has been without variation since March last year (note that this rate had bounced between 1.1 and 1.3 percent before today's report which include annual revisions).

These better-than-expected results together with this morning's mixed retail sales data and a hotter-than-expected producer price report leave Econoday's Relative Performance Index at plus 2, very near the zero line to indicate that recent US data on net are meeting forecaster estimates. When excluding the positive effects of mostly higher-than-expected price data, the index (RPI-P) falls to minus 13 to indicate that data on the real economy are coming slightly below estimates.

Jobless claims in the March 9 week are expected to hold little changed, at 215,000 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.