Initial claims headline number pointed to a more resilient than expected labor market in the week ended June 21, as claims fell 10,000 to 236,000, their lowest level in about a month. Forecasts in an Econoday survey had ranged from 240,000 to 248,000, with a median an 245,000. The previous week was little changed at 246,000 from the 245,000 initially reported.

The four-week average was virtually unchanged at 245,000 from 245,750 the previous week.

Beyond the headline, the picture remained fragile, with insured unemployment rebounding 37,000 to 1.974 million in the June 14 week, the highest level since the November 6, 2021 week, indicative of difficulty in finding a new job. The four-week moving average was up from 1.924 million to 1.941 million, the highest level since November 21, 2021.

Looking at unadjusted numbers, seasonal factors had expected initial claims to increase of 246 from the previous week, meaning virtually no change, but instead, unadjusted claims fell 9,438 from the June 14 week.

Regionally, advanced state claims showed New Jersey recorded the largest increase with initial claims up 5,811 in the June 21 week and Minnesota reported the largest decrease of 5,239.

Claims expected stable at the same 245K in the latest week from 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.