Initial jobless claims are up 17,000 to 242,000 at a seasonally adjusted level in the December 7 week after a negligible upward revision to 225,000 in the prior week. The level is substantially above the consensus of 220,000 in the Econoday survey of forecasters. New filings for benefits typically surge in the first week of December as many businesses' activity decelerates in the winter months. This year the first week of December sees an unadjusted increase of 99,140 to 310,366. This is more than the 76,932 rise that the seasonal adjustment factor accounted for. The seasonally adjusted four-week moving average is up 5,750 to 224,250 in the December 7 week.

A sharp one-week increase in new claims should not be overreacted to. The late timing of the Thanksgiving holiday may have meant some businesses waited until it was over before laying off workers. If this is the case, claims activity should be more modest in the coming weeks.

The seasonally adjusted level of insured unemployment beneficiaries is up 15,000 to 1.886 million in the November 30 week. Seasonal adjustment factors accounted for the unadjusted surge of 276,963 to 1.939 million in the same period. The seasonally adjusted four-week moving average is up 3,500 to 1.888 million for the week.

The insured unemployment rate is at 1.2 percent in the November 30 week, the same as the prior week. The unrounded unemployment rate is 1.2438 percent in the November 30 week compared to 1.2339 percent in the prior week. The underlying trend for the insured unemployment rate is hovering right below 1.3 percent, marginally higher than the 1.2 percent that persisted between March 2023 and the start of November. Unemployment for those eligible for benefits remains very low in the historical context but underlying conditions have eased a bit.

Claims popped up unexpectedly by 9,000 to 224,000 last week; forecasters look for 220,000 this 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.