But, I think the level of interest rates has a large impact on which projects are funded. With interest rates at zero (actually negative given inflation), almost anything is worth trying because you don't need a big return to come out ahead. And lots of those projects fail (never produce a product which can be sold), but while the projects are active people are employed. It's sort of like Venture Capital, but inside big companies: when interest rates are low, they run a lot of different riskier projects expecting some of them to pay off enough to make up for the failures.
When interest rates are higher, a project has to have a more certain return and a higher projected return in order to get funded. So weak projects are cancelled, or not started, people are laid off and hiring becomes really slow.
The mystery to me is why the rest of the economy didn't take off. Real estate did, and equities (stock market) did. But not the "main street" part of the economy or the industrial part of the economy. I think that since these parts of the economy did not take off, overall inflation remained relatively low.