Labor market tightening apace, although wages don’t seem to confirm this month.

You have see the wage data and probably the post-mortem on much of this.  To supplement what you already have, here is are just the charts updating my proxy of the Blanchflower-Levin measure of the employment  gap.

It is tightening more quickly than my earlier — neutralish — simulations implied, because the unemployment rate has made a discrete (noisy) move lower and (less importantly) because the number of people working part time for economic reasons continues to fall pretty quickly.

Screen Shot 2017-04-07 at 10.26.16 AMGiven this development, I would be more concerned for the durability of the expansion if wage growth were stronger.  The reason for this is that I take seriously the idea of the labor market constraint and fear a case developing for the Fed to hit the brakes to force growth down more than I fear the demand side of the economy just autonomously going into a funk.  A simpler way to put this is that the supply side is now finally relevant.

Others with a different model of the economy in their head may disagree on the grounds that labor market tightness indicators are bunk, that the demand side is more at risk than I assume or whatever. That is a very broad discussion.  But here is an update of those indicators along with my interpretation.

I really find it hard to see how an economic boom starts from here. But the behavior of wages at least suggests there is zero need for the Fed to panic yet. So I am a two-handed economist on this report.