Jobless claims have settled near the 230,000 level the last several weeks, up 4,000 to 232,000 in the August 17 week keeping the 4-week average stable at 236,000. The latter is only marginally higher than a month ago offering a rough indication that conditions in the labor market are little changed. This hints at (along perhaps with yesterday's dramatic downward revision to prior payroll results) a soft employment report for August which in July saw nonfarm payrolls rise by only 114,000.

Continuing claims in lagging data for the August 10 week were also little changed in line with recent results, up 4,000 to 1.863 million. The unemployment rate for insured workers holds where it has been since March last year, at a very low 1.2 percent.

Recent US data, like this report, have been coming in very near Econoday's consensus estimates, for a score near the zero-line of minus 7 on the Relative Performance Index.

Jobless claims for the August 17 week are expected to come in at 234,000 versus a lower-than-expected 227,000 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.