Employers cut jobs earlier in recessionsEmployment follows business cycle more closely than expectedBy Gordon Sova05/22/2009|hrreporter.com|Last Updated: 07/09/2009 It has been popular wisdom that employment is a lagging indicator of economic growth: employers hold on to employees beyond the point when they have enough to do and don’t hire them back until there has been growth for a significant period of time. This means that the unemployment rate does not reflect an economic downturn until after it has begun, nor does it reflect the return to good times until after it has taken hold. Equally, measures such as hours worked and productivity mirror this pattern.However, a recent study by Statistics Canada in the Canadian Economic Observer argues that this conventional wisdom is more an American than a Canadian phenomenon. After analyzing data from the last 30 years, StatsCan has found a close relationship between changes in output as measured by GDP and changes in employment. To Read the Full Story, Subscribe or Sign In Remember Me Forgot Password If you are a current Subscriber, please click here to set-up or update your login information.