The gap between productivity gains in the United States and the euro zone directly and indirectly explains the gap between inflation rates

Labour productivity has risen by 0.4% year-on-year in the United States, but has fallen by 0.9% in the euro zone. This gap between productivity gains explains why employment continues to grow in the euro zone even when growth is zero, and why labour market tightness is easing in the United States but remains very pronounced in the euro zone. So there are two causes, linked to productivity gains, for the much faster slowdown in inflation in the United States than in the euro zone: The gap between productivity gains; The gap between wage growth (faster in the euro zone than in the United States) due to the effect of the gap between productivity gains on the degree of labour market tightness.