Initial claims rebounded 44,000 to 236,000 in the week ended December 6, undoing the cumulative 37,000 decline over the four previous weeks to reach the highest level since the September 6 week. The four-week moving average rose to 216,750 from 214, 750.

In lagging data for the November 29 week, insured unemployment fell 99,000 to 1.838 million, marking the third consecutive weekly decline leading to the lowest level since April 12 week. The four-week moving average was down to 1.918 million from 1.945 million. The insured rate of unemployment edged down to 1.2 percent in the November 29 week, after remaining at 1.3 percent since the end of May.

Seasonal factors had expected an increase in unadjusted claims of 56,785 (28.7 percent) in the December 6 week from the previous week, but unadjusted claims rose far more, by 114,967 (58.0 percent).

Massachusetts (3,390), Wisconsin (3,379), Oregon (3,237) and Tennessee (3,205) all recorded increases topping 3,000 during the week.

Claims are seen rebounding to 219K after a surprise drop of 27K to 191K 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.