CHICAGO (Reuters) - In a trend that bodes badly for the U.S. jobs outlook, productivity in the world's biggest economy is probably not headed for a sharp slowdown, according to research from the Federal Reserve Bank of San Francisco.

Analysts generally agree that growth in labor productivity, or output per hour of labor, must drop for the labor market to recover strongly, San Francisco Fed senior economist Daniel Wilson said Monday in the latest issue of the regional Fed bank's Economic Letter.

Despite an unexpected decline in productivity in the second quarter, history suggests that productivity grows more quickly in a recovery than in the preceding recession, Wilson's research shows.

For moderate GDP growth to translate to reasonably strong employment growth in the next year or two, productivity would need to slow to about 1 percent or less, well below the 2.5 percent rate at which it grew during the recent recession, Wilson said.

"Today's forecasts of a sharp productivity slowdown, necessary for robust employment growth, imply a serious departure from history," Wilson said. "Productivity growth for the next year or so might very well exceed forecaster expectations, which would put a damper on employment gains."

As Fed policymakers prepare to gather Tuesday in Washington to debate if and when to launch a new effort to boost the sluggish economy, the U.S. unemployment rate -- at 9.6 percent and rising -- is likely to be a primary focus.

San Francisco Fed President Janet Yellen - who has been nominated as the Fed's next vice chairman -- is seen as one of the central bank's most dovish policymakers, concerned more with bolstering jobs than the potential for easy monetary policy to fuel inflation.

Jobs are also an important issue for politicians, as voters' economic concerns take center stage ahead of competitive mid-term congressional elections in November.

Wilson attributes some, if not most, of the recent rise in productivity to capital utilization.

"Although measures of capital utilization have grown rapidly during the recovery to date, they are still well below their historical averages," he wrote. "That suggests there is plenty of room for further increases in capital utilization over the next several quarters."

Such increases could drive further productivity growth, hurting chances for a strong recovery in jobs, he said.