Productivity Crushed Tariff-Driven Inflation | Business and Finance News

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Recorded19 Aug 2026

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New Boston Fed research reveals that worker productivity gains in 2025 actually offset much of the inflation caused by tariffs, suggesting inflation wasn’t solely driven by trade policy. Industries hit hardest by tariffs also saw the biggest productivity jumps, allowing them to absorb costs without raising prices. The net effect? Only half a percentage point of inflation. But here’s the twist: productivity didn’t mean more output—it meant workers put in fewer hours, and their pay share dropped, helping companies save money. Without these gains, inflation might have hit 2%, not 3%. The study warns against oversimplifying inflation drivers, as other factors—like AI or energy markets—may be playing longer-term roles. Listen in comfort:Get a discount on a Soli Pillow: http://solipillow.com/discount/dnn. Advertise on DNN:[email protected] This is an automated, high-level news summary based on public reporting.Report issues to [email protected]. View sources & latest updates:https://sources.thednn.ai/80dbdec69ba02c14

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