It is also due to the decrease in unit labor cost, which is often observed in the early stage of economic recovery. In the early stage of recovery, productivity rises as idle resources are brought back into use, unit labor cost declines, and then downward pressure on prices is seen.
The phenomenon of the decline in labor costs and prices coupled with higher growth was observed in 1987 and 1996. It appears that the factors behind this phenomenon have been partly responsible for the recent decline in prices, particularly in the GDP deflator.