NEW YORK (CNN/Money) - U.S. stock markets have been obsessed with oil prices lately, almost completely ignoring the 500-pound gorilla of a job report coming on Friday, which could be far more important to the long-run health of the market.

By now, every conscious man, woman and child in America knows oil and gas prices are high. Every day that energy prices cross some critical threshold or an OPEC minister clears his throat brings a fresh raft of breathless headlines in the news media and a commensurate shudder in stock prices.

Thursday was little different. OPEC, the cartel that produces more than a third of the world's oil, promised to raise production. At first, the disappointingly low amount of the increase kept the price of a barrel of crude oil above $40 on the New York Mercantile Exchange. Stock prices suffered.

But by midday, the price of oil fell to about $38 a barrel, and stocks recovered.

Meanwhile, the U.S. job market has been taking huge strides in the past couple of months, and is expected to move another big step forward on Friday, when the Labor Department prints its initial estimates for the unemployment rate and payroll growth in May.

Economists, on average, expect job growth north of 200,000 for the third straight month, a pace far stronger than necessary to keep up with the monthly growth of the labor force.

That has profound implications for stock prices, but you wouldn't know if from watching the market on Thursday, where it was all about oil, oil, oil.

"This is a disconnect; job growth is psychologically and practically the core of what's happening in the economy," said William Hummer, principal and market strategist at Wayne Hummer in Chicago. "In sharp contrast, the oil price is volatile. It's certainly not meaningless, but it's subject to so many variations that it doesn't have the same importance."

Related stories Passing the fuel buck OPEC loosens oil output Jobless claims down slightly Two-faced inflation Gas prices down, but for how long?

High oil prices act as a tax on consumers, whose spending makes up more than two-thirds of the total economy. Since most U.S. consumers can't avoid paying for gasoline, they'll have less money for more fun purchases, keeping economic growth in check. Businesses, too, will feel the pinch of higher energy prices.

On the other hand, oil and gasoline prices, adjusted for inflation, are nowhere near as high as they were in, say, the 1970s or the early 1980s, when supply shocks triggered recessions.

Meanwhile, a robust job market can be both a negative and a positive for stocks. On the down side, strong job growth tightens up the supply of workers in the labor market, forcing companies to pay more for wages and salaries.

Labor costs are the biggest component of inflation, so strong job growth puts the Federal Reserve on alert that it's time to start raising interest rates to tap the economy's brakes and keep things from overheating. Fed policy makers are widely expected to raise their target for a key overnight lending rate by a quarter percentage point at the end of this month.

But on the up side, strong job growth means consumers have more money to spend, helping boost corporate earnings.

To some degree, the stock market's recent snubbing of the job market is understandable. Many analysts believe Wall Street has already worked out its heebie-jeebies about the prospect of higher interest rates during a mild swoon that began in late January and continued through much of the year.

Thus, while strong jobs reports in March and April elicited much wailing and gnashing of teeth on Wall Street, another strong report on Friday could elicit little more than a yawn.

"It's a reasonably accepted conclusion that the Fed will raise rates in both June and August; that's what the market has discounted," said Hugh Johnson, chief investment officer at First Albany. "I don't know if Friday's employment report will change that, no matter what it says."

YOUR E-MAIL ALERTS Unemployment Oil and Gas Economic Indicators or Create your own Manage alerts | What is this?

And some analysts think markets could soon come to believe that a strong labor market is their friend, since it puts more money in consumers' pockets.

In fact, the market's ability to avoid a steep plunge -- in spite of turmoil in Iraq, terror attacks in Saudi Arabia, higher interest rates and inflation and the surge in oil prices -- could be a sign that investors are already looking on the bright side.

"We have so many negatives, so why is this market still staying where it is?" asked Ram Kolluri, chief investment strategist for GlobalValue Investors. "My contention is that earnings momentum will overcome any of these obstacles we're seeing."