Initial claims declined 10,000 to 214,000 in the week ended December 20, roughly in line with expectations in an Econoday survey of forecasters. The four-week moving average edged down to 216,750 from 217,500.

Seasonal factors had expected an increase in unadjusted claims of 20,817, or 8.2 percent from the December 13 week, but unadjusted claims rose just 8,832, or 3.5 percent.

New York reported the largest decrease (minus 1,108), followed by Georgia (minus 943), and Minnesota (minus 936). By contrast, the largest increase was in New Jersey (3,233), followed by Oregon (1,864) and Washington (1,594).

In lagging data for the December 13 week, insured unemployment increased another 38,000 to 1.923 million after rising 55,000 the previous week, indicating that people who are already unemployed might be finding it more difficult to find a new job. The insured rate of unemployment edged up to 1.3 percent after two weeks at 1.2 percent.

Claims expected at 225K, not much changed from 224K last week, which is down 13 from the week before that. It’s a noisy indicator week to week but the trend has been remarkably stable given all the sturm and drang over the job market.

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.