Journalists are neither statisticians nor data experts, so they really do not understand how to read the deluge of economic data being constantly released. Instead, they slavishly hew to a simplistic narrative involving unemployment claims and job creation. If either claims fall or there is positive job creation, the MFP consider this “improvement.”
This is the wrong way to view these numbers. Both data sets must be placed into context and reviewed with other data in order to create a complete picture of the American labor market. Jobless claims usually begin falling during a recession, and this is a leading indicator of recovery; however, low jobless claims in the middle of an expansion indicate that it is running out of steam. You can look at the chart and see for yourself what happens after jobless claims trough. (Hint: those gray columns indicate recessions)
The MFP also draws the incorrect conclusions from job creation data. The country needs about 200,000 new jobs per month to absorb new entrants into the labor force indicated by the red line:
The chart does not show an “improving” labor market, but a stagnant one. Essentially, after an initial burst of euphoria in 2010, the job market just got stuck. As long as job creation lags behind new entrants to the labor force, the labor market neither is improving nor will it improve.
As to why the labor market remains moribund despite the best efforts of the central bank, check out this chart:
Must be a coincidence, huh?