Jobless claims have moved a degree higher over the last several weeks in what will have forecasters trimming their estimates for the June employment report. Initial claims did fall 5,000 in the June 15 week to 238,000 but it wasn't enough to keep the 4-week average from rising by 5,500 to 232,750 for the highest level since September last year. This is a noticeable shift.

Continuing claims are also on the upswing, rising 15,000 in lagging data for the June 8 week to 1.828 million that follows a 22,000 rise in the prior week. This 4-week average, up just more than 10,000, is at 1.806 million for its highest level since February this year. Still, the degree of climb is incremental and hasn't yet lifted the unemployment rate for insured workers which holds at a tight 1.2 percent where it's been for the last year.

This all fits in with the Federal Reserve's assessment that the labor market is steadily rebalancing, that is the gap between the demand for workers and the availability of workers is gradually narrowing. Today's results indicate less-than-expected strength in the US labor market, echoing a recent trend of underperformance for US data that sees Econoday's Relative Performance Index moderately in the negative column at minus 18.

Jobless claims for the June 15 week are expected to fall modestly to 235,000 after climbing 13,000 to a much higher-than-expected 242,000 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.