to consider if this movement was consistent with our mandate for maximum employment. even with the easing in the labor market, consumer spending and overall economic activity continued to show solid growth. the combination of strong spending data and a cooling labor market was confounding. in thinking about this, i examined the productivity data that i follow closely and did not see the type of productivity growth i would have expected based on several other observations of the economy. for example, new business formation had surged in the post - pandemic period. it has been shown that newer firms foster innovation and boost productivity growth. business formation has remained elevated, from which i infer that the boost to productivity growth is not just a one - time phenomenon. also, in the post - pandemic period, workers switched jobs at much higher rates than typical. this likely led to better matches where workers can find more productive uses of their skills. in some cases, immigrants filled job openings for which employers traditionally struggle to attract workers. therefore, immigration can also contribute to improvements in job matches in specific but key sectors. as the economy reopened from the pandemic, many firms also invested in technology to substitute for workers, who were in short supply, which should support productivity gains. emerging technologies, most notably artificial intelligence, may also be starting to contribute to enhanced productivity. therefore, my speculation was that higher productivity was a possible explanation for the unusual combination of strong economic output, a cooling labor market, and declining inflation - even if it was not apparent in the quarterly data. that hunch was confirmed in september, when annual revisions to important economic data showed that economic activity and productivity growth had been stronger than previously estimated. the new figures indicated an average annual rate of productivity growth of 1. 9 percent since 2020, notably higher than the approximate 1. 4 percent annual rate in the five years before the pandemic. so that reveals our second positive shock : american workers have been more productive in recent years. this is a hugely important development because it increases the productive capacity of the economy and allows more rapid economic growth without overheating. what's more, revisions resulted in much better aligned gdp and gdi measures, and the two measures now also had much more aligned implications for productivity. in summary, the surprising and largely desirable outcomes for the economy in 2024 are easier to understand once we solve the puzzles i discussed. my thorough assessment of a wide range of data sources revealed that an unusual combination of reports over the past

according to eurosystem calculations, the output gap will return to close to zero by the end of the year ( - 0. 6 % ). the non - standard monetary policy that we have been conducting since 2014 is contributing to this acceleration of growth in the euro area, by fostering very favourable financing conditions and by supporting domestic demand. in concrete terms, this acceleration results in more jobs – over 6 million jobs created in the euro area since the start of 2013 – and in a pick - up in investment. corporate investment in particular, decisive for supply capacity, is clearly recovering : up 4. 7 % in 2015, 6 % in 2016, and is expected to be up 4 % in 2017 and 2018. [ slide ] this improvement in investment is underpinned notably by ongoing growth in lending to the private sector, at 2. 5 % year - on - year in august 2017 for firms and at 2. 7 % for households, with interest rates also remaining very low. we are also observing favourable developments in inflation, which is gradually moving back towards our target of 2 % over the medium term [ slide ]. after peaking at the start of 2017, the inflation rate stood at 1. 5 % year - on - year in september. this performance remains below our inflation aim, partly reflecting headwinds due to the past appreciation of the exchange rate. however, for 2017 as a whole, euro area inflation, at 1. 5 %, should be much higher than a year ago. for the next few years, we foresee inflation at 1. 2 % in 2018 and at 1. 5 % in 2019 – with a change in composition : less “ energy ” inflation, more underlying inflation. this represents a first success : our monetary policy measures have succeeded in warding off the risk of deflation which was still threatening the euro area last year – we mustn ’ t forget that inflation was declining in april 2016, standing at - 0. 2 %. that said, despite the progress made towards our target, it is still incomplete. underlying inflation, excluding energy and food, has admittedly increased – rising from 0. 8 % in the first quarter of 2017 to 1. 1 % in september 2017 – but it page 3 sur 8 still remains at subdued levels, despite the strong recovery in activity and employment. a significant factor is the relatively low nominal wage growth. among the cyclical factors, i would like to mention two in particular : first, persistent slack in the labour market