American workers are getting more productive. A recent study from the Bank of America showed the average revenue per worker for corporations in the S&P 500 touched an all-time high in February after 15 years of no gains. This is one of several signals that labor productivity is improving after dropping in 2022.

Some on Wall Street think the developments in labor productivity could help the stock market withstand the stickier-than-expected inflation that has emerged as a concern in recent weeks.

“If productivity goes higher, then [companies] are able to cut costs, improve margins, and things like that,” Bank of America US and Canada equity strategist Ohsung Kwon told Yahoo Finance. “That’s why firms are so focused on enhancing productivity. There’s a lot of macro-headwind happening. So they are trying to find methods to boost production and sort of offset those challenges.”

The challenges Kwon highlights include the likelihood that the Federal Reserve holds off on decreasing interest rates as inflation’s downward path continues to prove bumpier than initially predicted. Two different reports released this week revealed inflation was hotter than economists predicted in February. And annual wage growth for the month was stronger than what economists have said the Fed wants to see to be certain inflation is heading down to its 2% target.

The study team at Carson Group says an improvement in productivity could balance these worries, though. “With productivity soaring like it is and will hopefully continue like it can, you don’t have to worry about inflation coming back; you really don’t,” Carson Group chief market strategist Ryan Detrick told Yahoo Finance.

Detrick’s colleague, Sonu Varghese, stated that prolonged wage increases can usually produce an inflation problem if customers have more money to spend on items. Demand for items would rise as workers make more money, hence pushing prices up. This paradigm flips, though, if productivity increases. In that situation, the economy could absorb greater pay since enterprises would also be generating more things. If both the demand and supply of things pick up, then prices can remain steady.

Varghese noted two different situations where wage growth soared. In the 1970s, pay growth went up, but productivity didn’t, leading to a decade-long battle with chronic inflation. In the 1990s, wage growth advances were met with a productivity boom, which ultimately contributed to a fortunate period for both US economic growth and stock market gains.