• The economy still appears to be getting better. Citi's Economic Surprise Index has gone positive, and continues to rise.
• Unemployment fell to 8.1 percent. You might say this is meaningless, since it was a result of people leaving the workforce, but that doesn't change the fact that if the workforce is shrinking that rapidly, then the labor pool is marginally closer to full employment, thus creating inflation risk. The Fed might also wonder (as others have) whether the weak NFP number was the result of a bad seasonal adjustment, rather than an underlying reflection of the economy (other labor market indices were quite solid during the month).
• Meanwhile, the ECB just did the No. 1 thing that was needed for the global economy by taking the tail risk off the table with its bond buying program. That's FAR more important and impactful than anything the Fed could do right now.
• In the post Michael Woodford-era (Woodford being the economist who advocated NGDP targeting at the recent Jackson Hole conference), the Fed might feel as though a language change is the more robust move it can make.
• The bar is probably high due to the electoral scrutiny. Easing in December will be much more palatable, and the Fed will also have more clarity as to how the fiscal cliff will be resolved.
• Asset prices are at multi-year highs, and again, with the help of the ECB, financial conditions are quite easy.
It assumes that the base case is No More Easing. Joe is basically looking for the recent data to provide a compelling case for further easing. That's also what Nomura is doing when it says that the data doesn't show job growth falling off the cliff.