Worker productivity is booming. Why is inflation so tame?

Tracey Samuelson May 2, 2019
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Colby College, a small, private liberal arts college, will open the doors to the Davis Institute of Artificial Intelligence this fall. It plans on expanding the curriculum of AI and machine learning to all areas of study. Grant Hindsley/AFP/Getty Images

Worker productivity is booming. Why is inflation so tame?

Tracey Samuelson May 2, 2019
Colby College, a small, private liberal arts college, will open the doors to the Davis Institute of Artificial Intelligence this fall. It plans on expanding the curriculum of AI and machine learning to all areas of study. Grant Hindsley/AFP/Getty Images
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In the first quarter of the year, the productivity of U.S. workers rose at the fastest pace since 2014: 3.6%. Productivity gains like that are supposed to come along with plenty of inflation. But prices are barely rising. What gives? While American workers are more productive, their additional production isn’t translating to additional income. Instead, their employers are reaping the gains — and holding prices steady.

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