Jobless claims did fall back 10,000 in the May 11 week to 222,000 but against 232,000 in the prior week which was revised slightly upward and is the highest level since the August 26 week last year. The current 4-week average of 217,750, which is up 2,000 from the prior week, is the highest since last year's November 18 week. These levels are still very favorable but do indicate slight loosening in the labor market consistent with April's employment report that showed still strong but slowing payroll growth.

Continuing claims in lagging data for the May 4 week rose 13,000 to 1.794 million with this 4-week average steady at a 1.779 million level also consistent with labor market strength. The unemployment rate for insured workers remains where it has been for the past year, at a very low 1.2 percent. Whether and when the ongoing increase in initial claims will begin lifting continuing claims and with that the insured unemployment rate will play out in the weeks ahead.

US economic data are increasingly missing Econoday's consensus forecasts, at minus 13 overall on the Relative Performance Index and at a noticeably deep minus 35 when excluding inflation data, the latter reading underscoring underperformance for the real economy.

Jobless claims for the May 11 week are expected to come in at 220,000 versus an unexpected 22,000 jump to 231,000 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.