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Unless you’re living under a rock, you’re probably aware that the July non-farm payrolls figure fell short of expectations as it printed a 162,000 increase in hiring instead of the estimated 184,000 rise. On top of that, the previous month’s report was revised down from 195,000 to just 188,000, convincing most market watchers that the Fed’s taper plan might be pushed back.

However, other labor market indicators suggest that you shouldn’t rule out the September taper. In particular, the trend in the weekly jobless claims data paints a different story. But before we get down and dirty with the numbers, let me give you a quick background on what this report is all about.

What the heck are jobless claims?

Formal answer: The initial jobless claims report measures the number of individuals who filed for jobless benefits for the first time during the past week.

Street answer: Weekly initial jobless what now? Well, if you ain’t got a job and you signed up to claim your unemployment benefits for the first time, then you’ll be part of the initial jobless claims figure!

Why is this report important?

Formal answer: As the earliest labor data released from the U.S., it gives market watchers a glimpse at how the jobs market is doing before the bigger reports, such as the non-farm payrolls and unemployment rate, are printed. It provides clues on whether recent increases or decreases in hiring are being reversed or not.

Street answer: Who says you gotta wait an entire month for the non-farm payrolls and jobless rate to be printed before you get a clue about hiring activity? Heck no! With the weekly initial jobless claims release, y’all can tell if the labor market rocked like a Katy Perry concert or flopped like a Nickelback single.

Current trend in the unemployment claims

If the recent figures on claims are to be believed, we can keep our hopes high that employment heading up, up, and away. Reports have been consistently printing well below 400,000. In fact, the current 4-week rolling average at 335,500, is the lowest reading we’ve seen since November 2007!

Oil Prices

Don’t look now, but it seems that some Fed officials are starting to feel giddy over the economy. Atlanta Fed President Dennis Lockhart, Cleveland Fed President Sandra Pianalto, and even Chicago Fed President Charles Evans, a renowned member of the dove camp, have recently expressed a bias towards tapering sooner rather than later.

Yes, they did say that any decisions on monetary policy would depend on economic date, but lately, it appears that they have been more than pleased with what they’ve been seeing.

This led to speculations from some market junkies that the latest NFP figures may be nothing more than a fluke. That makes the next release on September 6 a must-watch event. Who knows – if the report comes in way better than anticipated, it may just give reason for the Fed to begin tapering.

Until then though, make sure to keep your eyes peeled for those weekly jobless claims report, as they could provide a different perspective on the labor market.