In a week shortened by the MLK holiday, claims for unemployment insurance fell by 43,000 to 265,000 and to the lowest level since April 2000. And while there was nothing conspicuous in the data compilation, the Labor Department acknowledged that fewer counting days for workers compiling the data typically means a more volatile plot.

It’s hard to refute the improvement in the labor market with the economy adding around 3-million jobs for 2014 and the most since 1999. The improvement may be linked to employers firing fewer seasonal workers initially hired to deal with the busiest time of the year. Hanging on to them by making those positions permanent would indeed signal economic confidence ahead – something that conflicts with recent data.

In its policy statement on Wednesday the Fed acknowledged the positive impact on consumption from declining energy prices. While December retail sales data challenges that assertion, the Fed is likely finding support from retailers and businesses who are largely optimistic about domestic economic prospects.

According to the Labor Department, no state reported an increase of more than 1,000 claims through last weekend. Markets remain on edge following the report in anticipation of next week’s nonfarm payroll report for January. The likely addition of another quarter-million or so jobs clashes head-on with the impact of a bear market for crude oil, which is having a major impact on inflation and in turn is stumping Fed-watchers keen to see an interest rate increase, but conflicted by a lack of price pressures. 

Chart shows jobless claims lowest since April 2000