Initial jobless claims fell again in the latest week, down 2,000 in the week ending November 23 from the upwardly revised 215,000 level (previously 213,000) reported for the prior week. The November 23 week's level is again below the consensus of 217,000 in the Econoday survey of forecasters.

The four-week moving average is down 1,250 to 217,000 in the November 23 week, after a revised 218,250 in the prior week.
Seasonal factors had expected an increase in unadjusted claims of 30,245 (14 percent) from the previous week, and the actual rise came in close to the expectation, +29,101 or +13.6 percent.

There was a noticeable jump in first-time claims filed in California, Georgia, Illinois, Pennsylvania, and Michigan.

Insured unemployment is up 9,000 in the November 16 week to 1.907 million, from a downwardly revised 1.898 million in the prior week and continuing claims are up by 94,000 from the same week a year ago, a sign of continued softness in the labor market. The four-week moving average is up 13,500 to 1.890 million, after an downwardly revised 1.877 million in the November 9 week. The insured rate of unemployment rose to 1.3 percent in the November 16 week, breaking a streak that goes back to March 2023.

The drop in first-time jobless claims notwithstanding, the high number of continuing claims compared to a year ago underscores the difficult conditions facing those searching for new employment. In the absence of new data showing no additional progress on slowing down the inflation rate further, this data point continues to support a possible Federal Open Market Committee decision to cut rates again in December.

The call is 217,000 for the week ended on Nov. 23 as forecasters look for claims to move back toward their four-week moving average of 218,000 from a surprisingly low 213,000 the previous week. Economists have been off on this one lately as they have underestimated the resilience of the employment market.

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.