Do Recommenders Need to Think in Words? Latent Reasoning for Efficient LLM-Based Recommendation

LLM-based recommender systems increasingly generate chain-of-thought (CoT) text before each item prediction to activate the LLM's reasoning capacity, costing tens to hundreds of extra tokens per recommendation at inference. We ask whether inference-time reasoning artifacts (textual or latent) can be replaced by training-time supervision alone, without loss of accuracy. We propose LatentRec, a framework for LLM-based generative recommendation that replaces inference-time reasoning artifacts with training-time per-step head supervision. LatentRec has three components. A 2.5M-parameter Continuous Thought Module iterates K latent reasoning steps over the LLM's hidden state during training. Soft Token Selection bridges the ~14x norm gap between hidden states and input embeddings. A Per-step Reasoning Loss (PRL) supervises every intermediate state through the LLM's prediction head against the first token of the target Semantic ID. The trained LLM retains this accuracy without the module at inference, so the module can be discarded at deployment. On three Amazon benchmarks, LatentRec improves HR@10 by 4.0-5.0% (relative) over a CoT-distilled baseline at 18.3x lower latency (batch=1). Per-step training supervision consistently improves accuracy across three datasets, paid once at training rather than at every recommendation.