Productivity growth over the business cycle: preview

I haven't hammered out a story yet, but here's some food for thought:



Lately productivity growth has accelerated, while the unemployment rate has skyrocketed. Some commentators (e.g.) have noted that businesses squeeze more output out of every hour of work, presumably by cutting down on the least productive tasks, jobs, or both. Eventually, the story goes, the squeezing will strain the employed labor force, forcing employers to resume hiring.

From the chart, it's obvious that unemployment and productivity growth are not always positively related. Why? What does it mean when they're not? What does the relationship tell us about an eventual job recovery?

Hopefully I'll find the time to write something soon. Stay tuned.