Initial jobless claims fell again in the latest week, down 6,000 in the week ending November 16 from the upwardly revised 219,000 level (previously 217,000) reported for the prior week. The November 16 week's level is again below the consensus of 219,000 in the Econoday survey of forecasters.

The four-week moving average is down 3,750 to 217,750 in the November 16 week, after a revised 221,500 in the prior week.
Seasonal factors had expected a drop in unadjusted claims of 12,457 (5.4 percent) from the previous week, but the actual decline was larger than expected - 17,750 or -7.7 percent.
There was a noticeable drop in first-time claims filed in California, Georgia, New Jersey, and Texas.

Insured unemployment is up 36,000 in the November 9 week to 1.908 million, after a downwardly revised 1.872 million in the prior week and continuing claims are up 113,000 from the same week a year ago, underscoring the current softness in the labor market. The four-week moving average is up 5,000 to 1.879 million, after an downwardly revised 1.874 million in the November 2 week. The insured rate of unemployment remains steady at 1.2 percent in the November 2 week and has seen almost no variation since March 2023.

The elevated number of those who continue to receive unemployment benefits compared to a year ago underscores the growing difficulty in finding new employment. In the absence of evidence that the progress has stalled on slowing down the inflation rate, this data point will support the Federal Open Market Committee's decision to cut rates again in December.

After a lower than expected 217,000 in the prior week, forecasters expect claims to edge up to 219,000, closer to the four-week moving average at 227,250.

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.