Sometimes in literature it seems like there are a certain standard things that are almost always a symbol for something else. For example, a maze is almost always a metaphor for the navigation of life. In our story we are given the symbol of a compass, which in literature is almost never just a way to find true north.
I felt in my pocket for my compass. My father had given it to me for my tenth birthday, and I carried it with me always. It was a handsome thing, a smooth lozenge of brass and glass, with a hinged lid. On the back were engraved the words, "From one sailmaker to another." (3.3)
We all know by now that Matt has had a hard time dealing with the death of his father (okay, that's the understatement of the year). To have such a treasured item from him—an item that he knows his father held in his hands and used many times—makes the compass kind of sacred. To carry it around with him at all times makes Matt feel like he's carrying around a piece of his dad with him, too.
It's also a useful gadget to have around:
I felt in my pocket for my compass. It was a point of pride to me that I rarely needed to consult it. […] But I needed it now. Before we'd taken shelter we'd been so swirled about by the wind I'd lost all sense of direction. (12.11)
Here is where we get to the symbolism stuff. Matt doesn't need to consult the compass all that often because he was a wonderful innate sense of direction. But the directions he needs from it are less tangible than north, south, east and west—the compass is a symbol for the guidance he wishes could come from his father. In other words, it's a tool that Matt can refer to when he's feeling like he doesn't know what to do or which direction he should go. In this context, consider this quote from the end of the book:
She reached into her purse and brought out my father's compass. […]
"Thank you," I said, taking it back. Holding it again, I realized how much I'd missed it. But I was also sorry it would no longer be in her hands. I'd liked to think of her holding it, watching the needle spin north.
"Don't want you veering off course," Kate said. (21.75-77)
We think the fondness Matt feels for Kate with his compass indicates that Matt not only has made a good deal of peace with losing his father, but also—perhaps—that he's matured into the role of being a guide, instead of just needing guidance. What do you think?