By Kristin Myers, Editor-in-Chief

What's Happening Today

September is here and while the new month could bring new worries for investors, it could also deliver signs of hope. Over in the labor market, the number of people filing for unemployment for the first time (what's known as jobless claims) fell to 232,000 at the end of last week. That's the lowest level since July.

This could be good news. So few people filing for unemployment benefits through the month of August might mean the unemployment rate didn't go up last month, but we'll find out when job numbers are reported tomorrow. So we might not need to worry that a wave of layoffs will be hitting us just yet.

But a strong jobs report could also reinforce the Federal Reserve's belief the U.S. economy will be strong enough to handle more interest rate hikes. Yes, that means inflation should hopefully come down, but higher interest rates might take a bite out of corporate profits, which investors don't love.

Stocks closed out the month of August with losses and are still losing ground today to start the new month. Expectations of another large rate hike when the central bank has its next policy meeting on September 20 and 21 are continuing to weigh on investors. And if the jobs report is strong, the chances of another super-sized rate hike of 75 basis points will go up. Currently, the markets are forecasting a 72% chance that the Fed will hit us with another huge hike.

But what would another rate hike mean for you? The higher interest rates go, the more you can expect rates to go up on loans like a mortgage or a car loan.

- Kristin

Editors' Picks

US Jobless Claims Decline for a Third Week to a Two-Month Low (Bloomberg)

Rising Rent: Why Prices are Only Going Higher (The Washington Post)

As the U.S. Dollar Surges, American Buyers Splurge on European Homes (The Wall Street Journal)

Tech Companies Slowly Shift Production Away From China (The New York Times)

Investing for Teens: Everything You Need To Know (The Balance)

How to Make the Most of Your First Paycheck (The Balance)

Simple vs. Compound Interest: What's the Difference? (The Balance)

Term of the Day

Interest

Interest is the price of debt. Anyone can find themselves on either side of this situation. When you take out a loan, you acquire debt and pay interest. When you let someone else (like a bank) use your money, you extend credit and get paid interest. The amount you pay or receive is typically quoted as an annual rate, but it doesn't have to be.

Interest costs require additional repayments on top of the original loan balance or deposit. Due to interest, you will ultimately repay more than you borrow from a lender. Conversely, interest payments make loans profitable for lenders.

Off the Charts

When you understand the time value of money, you'll see that compounding and patience are key ingredients for building wealth.

The foundation behind compounding interest is the concept of the time value of money, which states that the value of money changes, depending upon when it is received. Compounding allows that money to grow.

For example, if you contributed $100 per month to an investment account for 40 years, earning a 10% annual rate of return on investment each year, your money could grow to be more than $530,000.