Initial jobless claims are down 6,000 to 233,000 in the week ending June 22 after a small upward revision to 239,000 in the prior week. The reading is close to the consensus of 236,000 in the Econoday survey of forecasters. The four-week moving average is up 3,000 to 236,000 in the June 22 week. After a little escalation in filings for benefits in mid-May and early June, the underlying pace seems to have leveled off somewhere in the 230,000-240,000 range. While this is an uptick, the level remains modest in the historical context and consistent with a healthy labor market in a tempered expansion.

The number of insured unemployment beneficiaries is up 18,000 to 1.839 million in the June 15 week from 1.821 million in the prior week. The change is well within normal week-to-week variation. The level is over the 1.8-million mark for a third week in a row, pointing to a slight increase in the number of unemployed among those eligible for benefits. The insured rate of unemployment is 1.2 percent in the June 15 week, up a tick from the revised 1.1 percent in the prior week. The reading for the June 8 week is the only time the rate has been other than 1.2 percent since March 2023. The jobs market has remained consistently tight, at least for this segment of the labor force.

Jobless claims for the June 22 week are expected to tick down to 236,000 from 238,000 a week ago. Claims have moved higher the last several reports.

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.