Perhaps the only indicator that could upend a September rate cut is the August employment report, that is if nonfarm payrolls ratchet back up to prior rates of growth. Weekly jobless claims aren't pointing perhaps to accelerating payroll growth but they're not pointing to any slowing. Initial claims fell 7,000 in the August 10 week to a lower-than-expected 227,000 in turn pulling down the 4-week average by 4,500 to 236,500. Claims had been rising in recent weeks, to as high as 250,000 in late July but two weeks of slowing hint perhaps to a return to the 220,000 and below levels of the spring.

Continuing claims in lagging data for the August 3 edged 7,000 lower to 1.864 million with this 4-week average inching higher to 1.862 million. Though steady, continuing claims are nevertheless at a multi-year high in contrast, however, to the unemployment rate for insured workers which remains where it has been since March last year, at a very low 1.2 percent.

This report still points to strong demand for labor and tight conditions in the labor market, and together with stronger-than-expected retail sales data also released at 8:30 a.m. ET this morning have given a significant lift to Econoday's Relative Performance Index (RPI) which now stands at 16 overall and at an even stronger 26 when excluding what have been more moderate-than-expected inflation data. These RPI scores point to outperformance for the US economy which, again, if extended to the August employment report could spell disappointment for those counting on Federal Reserve accommodation.

Jobless claims for the August 10 week are expected to come in steady at 234,000 versus 233,000 in the prior week. Claims have been up and down in recent weeks along a roughly 230,000 to 250,000 trend.

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.