Initial jobless claims came in higher than expected in the latest week, rising by 18,000 in the week ending April 26 from the revised 223,000 level (previously 222,000) reported for the prior week. The April 26 week's level compares to the consensus of 221,000 in the Econoday survey of forecasters. The four-week moving average is up by 5,500 to 226,000 in the April 26 week.

Seasonal factors had expected a decline in unadjusted claims of 3,791 (-1.8 percent) from the previous week, but they actually rose by 12,901 (+6.1 percent), instead.
New York (+15,525) and Massachusetts (+3,251) were the only states with noticeable increases in unadjusted first-time claims. Connecticut (-2,300) reported a significant decline.

Insured unemployment rose by 83,000 in the April 19 week to 1.916 million from a downwardly revised 1.833 million in the prior week and continuing claims are higher by 145,000 compared to the same week a year ago, an ever-present reminder of the labor market's weakness. The four-week moving average is up by 5,750 to 1.868 million, from a revised 1.862 million in the April 12 week. The insured rate of unemployment rose to 1.3 percent in the April 19 week.

Initial claims numbers were on an upward trend through most of April, while the persistently high level of continuing claims (yet to drop below 1.8 million since May 2024) underscores the growing downside risks to the Federal Reserve's employment mandate.

Claims have been seesawing around the 4-week moving average near 220K and are seen at 221K in the latest week versus 222K last 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.