Productivity increased in the first quarter (see Investment News article). It could be argued that the higher number was due in part to companies needing to get the job done with less employees and less hours worked after massive layoffs, but it does signal that companies are becoming more efficient, just at a time when labor costs are down - given the lower head counts. Therefore, while the numbers are not encouraging for employees since hours worked have also decreased, a jobless recovery could result in higher productivity, lower wage growth, and smaller labor costs for companies, helping to stimulate corporate profits going forward. While employment and wage growth will eventually need to increase to bolster consumer spending and further economic growth, productivity-based higher corporate earnings may be enough to help drive a summer rally for select stocks, or at least explain the recent rally over the last few months.