But there are signs that slack is now diminishing, and that the relationship between slack and wages is slowly re-asserting itself.
The unemployment rate continues to decline and now stands at close to a nine-year low of 8.7%, down by 3.3 percentage points from its highest level. As more people find jobs, household incomes rise. This has helped to strengthen private consumption growth, which in turn is boosting business investment. In addition, a number of other factors have supported investment.