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The reverse OPEC maneuver
The U.S. economy has been doing very well over the past year. Since summer 2022, unemployment has continued to fall, even as inflation has dropped from the 8-9% range to maybe 4-5%. chart You can look at other measures of prices and the labor market, but they’ll tell the same story. When you see inflation go down and the real economy continue to do well, you should probably look around for a positive supply shock — something that allows the economy to produce lots of things more cheaply. And when you look for a positive supply shock, you should usually start by looking at whether energy has gotten cheaper, ... (full story)