And that brings me to the second point, which is that we cannot be sure whether we are measuring slack correctly in the first place. The unemployment rate, for instance, is based on a narrow definition. Just think of people who work part-time. Officially, they are employed, but they could work more, of course.
One caution is that some of the recent buoyancy in household attitudes and strength in consumer demand also may reflect the unwinding of earlier increases in gasoline prices, in which case part of the strong gain in spending in recent months may be transitory.