Initial jobless claims fell again, are down 15,000 in the week ending October 19 holiday week after an upward revision to 242,000 from 241,000 in the prior week. The October 19 level is nowhere near the 247,000 consensus in the Econoday survey of forecasters. The four-week moving average is up 2,000 to 238,500 in the October 19 week, after a revised 236,500 in the prior week.

The fall in claims was once more a surprise, with many analysts expecting an increase in filings due to Hurricane Helene and from the drawn-out strike activity at Boeing. However, seasonal factors had expected a 9,426 (or -4.2 percent) decline in unadjusted initial claims from the previous week.

There was a noticeable drop in claims filed in Georgia, New York, North Carolina, and Texas, while Florida saw the largest increase.

Insured unemployment is up 28,000 in the October 12 week to 1.897 million, after a revised 1.869 million in the prior week further sign of the ongoing softness in the labor market. The four-week moving average is up 17,500 to 1.861 million, after 1.843 million in the October 5 week. The insured rate of unemployment remained steady at 1.2 percent in the October 12 week and has seen almost no variation since March 2023.

The initial jobless claims data continues to be volatile, moving out of step with economists' expectations. The steady upward march in the number of those who continue to receive unemployment benefits, however, underscores the difficulty many face in finding new employment. The Federal Reserve will likely focus on this aspect of the data as it tries to assess underlying developments in the labor market.

Initial jobless claims in the US are expected to rise to 247,000, more than the prior week's 241,000. This is due to the expected surge in filings following hurricanes and possibly to a lesser extent the Boeing strikes.

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.