Initial jobless claims came in lower than expected at 220,000 in the latest week, falling by 2,000 in the week ending March 8 from the revised 222,000 level reported for the prior week. The March 8 week's level compares to the consensus of 230,000 in the Econoday survey of forecasters. The four-week moving average is up by 1,500 to 226,000 in the March 8 week, after a revised 224,500 in the prior week.

Seasonally adjusted insured unemployment declined by 27,000 to 1.870 million in the week ending March 1 from the previous week's unrevised 1.897 million. The 4-week moving average was 1,872,250, up 6,250 from the previous week's 1,866,000.

The unadjusted insured unemployment rate was 1.4 percent during the week ending March 1, down 0.1 percentage point from the prior week.

Of interest in a period when layoffs of federal workers are in focus, initial claims filed by former federal civilian employees totaled 1,580 in the week ending March 1, a decrease of 54 from the prior week, BLS said. The largest increases in initial claims for the week ending March 1 were in New York (+15,513), Texas (+1,774), Kentucky (+891), Arkansas (+603), and New Hampshire (+573), while the largest decreases were in Massachusetts (-3,885), Rhode Island (-1,984), Michigan (-1,933), Illinois (-1,051), and Iowa (-982).

Claims are expected to rebound to 230K in the latest week after dropping by 21,000 to 221K a week ago.

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.