The first difference stems from productivity gains, which are high in the USA and negative in the Eurozone. The result has been low wage inflation in the US and high inflation in the eurozone, especially since wage increases in the US are held back by growth in the working-age population and immigration, while in the eurozone they are stimulated by the decline in the working-age population.
The gap between productivity gains in the US and the eurozone is due to the gap between investment in new technologies and R&D spending levels. This leads to a significant gap between potential growth in the US and the eurozone, amplified by the gap between growth rates of the working-age population.
Lastly, there is also a significant difference between trends in profitability and margin rates. They are rising sharply in the USA, while stagnating in the eurozone, reflecting the weakness of unit labor cost increases in the USA (due to the fact that real wages have risen less than labor productivity).
All in all, the USA has structurally lower inflation, stronger growth and higher corporate profitability than the Eurozone, but as a result of income distribution that is more unfavorable to wage earners, the USA also has a much higher level of inequality and poverty than the Eurozone.
