Initial jobless claims remained steady at 248,000 in the week ended June 7, above expectations that had centered on 243,000 in an Econoday survey of forecasters, with the highest estimate at 250,000. The previous week was revised sightly up to 248,000 from 247,000.

With initial claims over the past two weeks at their highest level since the week ended October 5, 2024, the 4-week average was up 5,000 to 240,250 in the June 7 week, the highest since August 26, 2023 week.

Overall, the report reflected ongoing labor market weakening conditions amid tariff-related uncertainty that keeps businesses on the defensive. This is consistent with the latest Beige Book published June 4 that reported widespread comments about firms delaying hiring due to uncertainty.

In lagged data, continuing claims increased 54,000 to 1.956 million in the May 31 week, the highest level since the week ended November 13, 2021, indicative of difficulty finding new jobs, consistent with the Beige Book's finding noting a larger number of applicants for open positions.

Unadjusted claims were up 35,783 to 244,752 in the week ended June 7, slightly more than the 35,200 expected by seasonal factors.

The largest unadjusted first-time claims for the June 7 week were recorded in California (9,433), followed by Minnesota (4,682) and Pennsylvania (3,860). The largest decline was in Kentucky (-4,245) after an increase in the May 31 week attributed to layoffs in the manufacturing sector.

Claims have been rising lately, raising concern about the job market. The consensus looks for claims to retreat only slightly to 243K in the latest week from a recent high of 247K 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.