This is the Fed’s own index and it’s on the very weak side:

Labor Market Conditions Index
Friday’s employment report, led by a 211,000 rise in non-farm payrolls, was solid but didn’t give the labor market conditions index much of a boost, coming in at only plus 0.5 vs expectations for plus 1.7. The October index, however, was revised 6 tenths higher to plus 2.2 reflecting in part the upward revision to that month’s nonfarm payroll growth which now stands at a very impressive 298,000. After dipping in the spring, this indicator, despite November’s soft outcome, is now on a seven-month winning streak.

Do you really want to bet against a currency with this kind of trade balance (surplus) and teetering on deflation? Looking like the yen fundamentals used to look when it was the strongest currency in the world, before the tsunami closed the nukes and the surplus turned to deficit? 😉

Fed comment:

The Fed uses models that use oil futures as indicators of the future price of oil, so they are currently forecasting a rise in oil prices and therefore a rise in inflation,vwhich feeds into their decision regarding interest rate policy.

Unfortunately, the FOMC doesn’t seem to understand the difference between the analysis of perishable vs non perishable commodities, and therefore they don’t recognize the higher oil futures prices express the cost of storage, rather than an indicator of future spot prices.