Initial jobless claims came in as expected, with the level reported in the week ending May 10 the same as the revised 229,000 level (previously 228,000) reported for the prior week. The May 10 week's level matches the consensus of 229,000 in the Econoday survey of forecasters. The four-week moving average is up by 3,250 to 230,500 in the May 10 week.

Seasonal factors had expected a decline in unadjusted claims of 2,743 (-1.3 percent) from the previous week, and the actual decline was just slight lower down 2,630 (-1.3 percent).

Massachusetts (+3,446) was the only state with a noticeable increase in unadjusted first-time claims. Michigan (-5,903) was the only state to report a significant decline.

Insured unemployment rose by 9,000 in the May 3 week to 1.881 million from a downwardly revised 1.872 million in the prior week and continuing claims are higher by 91,000 compared to the same week a year ago, underscoring the ongoing labor market softness. The four-week moving average is up by 750 to 1.874 million, from a revised 1.873 million in the April 26 week. The insured rate of unemployment remained at 1.2 percent in the May 3 week.

Initial claims numbers have at the beginning of May, but the persistently high level of continuing claims (yet to drop below 1.8 million since May 2024) once again underscores the uncertainty around the economic outlook highlighted in the May 7 FOMC statement.

Claims are seen pretty flat at 229K from 228K in the previous 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.