US productivity growth may have slowed inflation without triggering recession.

An improving productivity situation in the United States could explain the recent decline in inflation amid a robust economy. This situation is actually a historic event, as inflation returns to normal levels without causing a recession, a scenario referred to as a "soft landing". In 2023, the US economy could grow substantially without incurring inflation, since there was strong productivity growth, meaning that workers gained strong wages without bosses having to pass the cost to consumers. In basic terms, this is because the economy was producing more with less effort.

February 17, 2024
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