Initial jobless claims are up 14,000 to 249,000 in the week ending July 27 after an unrevised 235,000 in the prior week. The level is above the consensus of 236,000 in the Econoday survey of forecasters. The level of claims has been alternating between up and down weeks since mid-June, but the underlying trend appears less volatile. The four-week moving average is up 2,500 in the July 27 week to 238,000. Layoff activity has crept higher since the start of the year, but not alarmingly so. Levels in the mid-200,000's remain consistent with a healthy labor market.

The level of insured unemployment is up 33,000 to 1.877 million in the July 20 week after a downward revision to 1.844 million in the prior week. The four-week moving average is up 5,250 to 1.857 million. Here also the levels are rising incrementally, if unevenly. There are more workers on the unemployment rolls, but not at concerning levels. The time on the unemployment rolls may be longer for some workers. The insured rate of unemployment for workers eligible for unemployment benefits remains at 1.2 percent and has been there since March 2023.

Jobless claims for the July 27 week are expected to hold steady at 236,000 versus 235,000 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.