In recent years, the unemployment rate has fallen to low levels (4.7%). Some people continue to argue, however, that there is a lot of labor market slack. They point to data such as the U-6 unemployment rate, as well as the labor force participation rate. But with today's jobs report, it's becoming almost impossible to continue arguing for labor market slack. The labor market is clearly tightening:
There is no longer any respectable argument for monetary or fiscal stimulus. There are arguments for stimulus that deny the natural rate hypothesis, but having lived through the 1970s once, I'd just as soon not experience it again.
Time for supply-side policies, beginning with a repeal of those idiotic overtime rules. Then on to tax reform.