The Market’s Big Puzzle: What Is Happening to Growth and Inflation?

Wall Street Journal, Sep 6, 2017
by Jon Sindreu

The world’s major nations are reporting stronger economic growth. Yet what was once thought to be growth’s constant companion is puzzlingly missing: Inflation.

The U.S. economy grew at an annualized 3% in the second quarter, but in July consumer-price inflation was up only 1.7% from the prior year.

Japan’s economy grew 4% annualized in the same quarter, for its longest expansion streak since 2006. Yet inflation keeps hovering around zero, as it has for most of two decades. Eurozone inflation is stuck at 1.5% despite the bloc’s accelerated recovery.

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