Joe Pitts, Decmber 6, 2002

For well over two years, now, Americans have been worrying about the economy. The recession has been over some time, but the economy continues to sputter and too many Americans are still out of work. Things are improving, but we have farther to go and more to do before full-throttle prosperity comes back.

What exactly is a recession? The most popular definition is two consecutive quarters of negative growth in gross domestic product. Gross domestic product is the total value of every good and service produced by the American economy. When the economy is expanding, that GDP goes up. When the economy is shrinking, GDP goes down. If GDP goes down for six months, a recession is declared.

While the economy remains weak, the recession ended more than a year ago. It lasted for nine months, from January to September of 2001. Since then, we’ve had positive growth in every quarter, ranging from 1.3 percent to 5 percent.

Unlike most historical recessions, consumers have been the heroes of the economy this time around. Consumers have kept on buying new cars and Christmas presents despite a sputtering economy. Businesses, however, haven’t been so bold. Thousands of workers have been laid off to cut costs, and more has been demanded of those who remain. That’s what accounts for the historic increases in worker productivity that have been reported in recent months.

High productivity is a good sign for the economy, it means businesses are paying less to produce more. That increases profits and allows for expansion and, eventually, new jobs. But greater productivity can also result in layoffs, as fewer workers are needed to achieve the same result.

For more than two years, businesses have been jittery. They’ve been slow to invest because they think the economy is too weak to reward that investment quickly. Some have lain off workers because of weaker markets and increased productivity.

Right now, nationwide unemployment is six percent. Six out of every hundred people who are looking for work haven’t found a job. That’s higher than the unemployment rate has been for months.

Things are looking good for the economy. The nine-month recession that began at the end of the Clinton Administration was quickly nipped in the bud by the Bush tax relief package. In fact, the recession ended almost exactly as soon as people began receiving their tax refunds in the mail.

The economic stimulus package passed by Congress further aided the economy, while also extending unemployment benefits for people out of work.

The recession is over, and the economy is improving. The technical definition of a recession is negative growth in GDP. The real-world definition is too many people out of work.

Congress, working with the President, has worked hard to get the engine of the American economy going strong again. Not until that engine moves into higher gear, however, will unemployment finally decrease. Not until businesses feel confident enough to invest in new jobs will new jobs be created.

The recession is long over and Congress has worked with President Bush to jump-start the economy. But there’s more to do. The job won’t be complete until every American who needs a job has one.

Congressman Joe Pitts is a Republican member of the U.S. House of Representatives from Pennsylvania.