What would core inflation be in the euro zone today if it had had the same productivity gains as the United States?

Labour productivity rose by 9.4% between the first quarter of 2019 and the fourth quarter of 2023 in the United States, but fell by 0.8% over the same period in the euro zone; between the third quarter of 2022 and the fourth quarter of 2023, it rose by 2.4% in the United States and fell by 1.6% in the euro zone. Inflation excluding energy, food and rents imputed to homeowners is now (January 2024) 2.7% in the United States, while inflation excluding energy and unprocessed food is now (February 2024) 3.3% in the euro zone. If labour productivity in the euro zone had grown at the same rate as in the United States since the start of 2019: Unit labour costs would have risen by 2 percentage points less on average each year in the euro zone; Employment would have been 10.2 pp lower in the euro zone, which would have led to a reduction in labour market tightness similar to that seen in the United States, resulting in a slowdown in wage growth of around 0.4 pp. All things considered , if labour productivity had risen in the euro zone as it has in the United States, core inflation in the euro zone would now be 0. 9 % rather than 3.3%.