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The Economy in Perspective

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On the road again … U.S. stock markets rallied on news that employment grew only 43,000 in February; market participants had expected a figure five times that size. Reactions like this no longer puzzle readers of the business press, who have been conditioned to believe that strong economic growth increases the risk that inflation will accelerate. This outcome is not entirely unthinkable, but neither is it inevitable. Vigorous economic growth in itself does not cause inflation to accelerate, but it can appear to do so.

Suggested citation: "The Economy in Perspective," Federal Reserve Bank of Cleveland, Economic Trends, no. 00-03, pp. 01, 03.01.2000.

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