A recent manifestation of these costs can be seen in the lower level of high-tech capital investment in continental Europe, on average, and in Japan, relative to that in the United States. Arguably, this outcome has resulted to an important degree from the particular legal structures and customs that govern labor relations in much of Europe and Asia.
If so, downward pressure on PCE (personal consumption expenditures) inflation, which was already running somewhat below our 2 percent objective when the downturn began in March, will continue.