Initial jobless claims continue to edge higher, up 4,000 in the June 29 week to 238,000. This is modestly above Econoday's consensus for 233,000 and lifts the 4-week average by 2,250 to 238,000 for the highest level since August last year.

Continuing claims likewise continue to climb, up 26,000 in lagging data for the June 22 week to 1.858 million with this 4-week average at 1.831 million, its highest level since all the way back to December 2021. Nevertheless, the increase isn't enough to lift the unemployment rate for insured workers which holds at a very low 1.2 percent, which is where it's been since March 2023.

Though claims are moving higher to indicate easing demand for labor, levels remain historically low and consistent with a tight labor market. For now, the increases aren't likely to raise concern inside the Federal Reserve that rates need to come down, assuming that is that levels don't continue to climb in the coming weeks.

Jobless claims for the June 29 week are expected to come in at 233,000 versus 233,000 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.