New jobless claims fell again last week, dropping by a seasonally adjusted 5,000 to 382,000, the Labor Department reports. The widely watched four-week moving average slipped as well, retreating to its lowest level in two-and-a-half years. It’s clear that new filings are trending lower once more, if slowly. But the ongoing strength in the oil market raises the question of whether higher energy prices are a threat?

The answer’s unclear, of course, since no one knows if oil prices will keep climbing. Meantime, the impact of higher energy costs, which may or may not be temporary, is only just beginning to filter into the wider economy. It’s going to take time to learn how higher oil prices will affect the recovery, which means that economic reports will be less informative for a time.
Meantime, we have to make due with the numbers we have. On that basis, it’s clear that the labor market is showing signs of progress again, or at least it has been. It’s interesting to note that the renewed decline in jobless claims began last fall, roughly in line with the point when expectations started bubbling for the Fed’s QE2 monetary stimulus. Coincidence? Maybe, although a number of economists say there’s a connection. Of course, you can find many dismal scientists who disagree.

Whatever the cause, the now-routine reporting of jobless claims under the 400,000 mark, while a long time coming, is encouraging. Let’s just hope it’s not about to be derailed by oil prices.
“The labor market recovery is on track,” David Semmens, an economist at Standard Chartered Bank in New York, tells Bloomberg. “The unemployment rate will see a slow-but-steady grind down.”