Latest Economic Data: Non-farm productivity was up last quarter by 9.4% according to the Bureau of Labor Statistics. That's big growth. But isn't increasing productivity at fault for the (relatively) jobless recovery? That is to say, shouldn't this kind of productivity growth be a note of caution?

"No," say James Cooper and Kathleen Madigan in Businessweek:

The crucial link between productivity and demand is income. Look at it this way: When an economy generates new output, measured by gross domestic product, it creates an equal amount of new income that is distributed either to workers as compensation or to businesses as profits. The key is that faster productivity growth allows the same workforce to generate more income, a process that in recent years has added handsomely to both business profits and to the real compensation of workers with jobs.

. . . With demand now picking up strongly, free of its encumbrances, companies are responding by lifting output, even in the industrial sector. That's creating new income at an accelerating clip that will begin to support new hiring. And because workers are more productive, each new hire will add more to overall purchasing power than in past recoveries, enhancing the classic virtuous cycle of growth. And since productivity has also helped to keep inflation low, the Federal Reserve will have extra leeway to keep interest rates down and allow the cycle to gather a good head of steam.

Makes sense to me. It's not much comfort to anyone in an unemployment line (and I was there this year, friends), but a slow return to normal employment (whatever the hell that is anymore) is better than a hiring spike that can't hold.