Joseph R. Pitts, December 5, 2003

Numbers released recently by the Department of Commerce confirm that our economy continues to grow at a blistering pace.

Several weeks ago an unofficial estimate had the economy growing at an annual rate of 7.2 percent in the third quarter of 2003. Analysts said this would drop, because it usually does. But the more accurate revised number shows the economy growing at an annual rate of 8.2 percent. This is the fastest rate of growth since 1984.

American manufacturing is growing at a rate not seen in nearly two decades. Leading national economists predicted that growth in the sector would remain stagnant in October. Instead, it posted its strongest showing since December 1983. Demand continues to increase for manufactured products.

Construction spending jumped a full percentage point in October, setting a record for the fourth straight month. Consumer confidence continued to grow in October. The first holiday shopping weekend had record-breaking retail sales.

Within days after the Department of Commerce reported that the economy grew faster than it originally estimated in the third quarter, news came that productivity surged at an annual rate of 9.4 percent, the best showing in 20 years, in the third quarter.

This number also exceeded the government's initial estimate of 8.1 percent, and the second quarter's productivity rate of 7 percent. Increased productivity means that businesses are producing more per worker, generating more profits, and paying higher wages without increasing prices.

A nation’s standard of living is tied to the economy’s productivity numbers. Higher productivity produces a higher standard of living for everyone.

These are all great numbers to throw around. Economic growth is good for all of us. But they are only important if people are getting back to work.

As we begin the holiday season, too many of Pennsylvania’s families are out of work. While our unemployment rate has hovered below the national rate, these families serve to remind all of us that there is still work to be done.

However, there are good signs for these families.

Unemployment claims dropped to the lowest level in almost three years. In November, the unemployment rate dropped from 6.0 percent to 5.9 percent in November. This is significant.

Unemployment typically increases during the initial stages of a recovery (as more people look for jobs). During this recovery, the unemployment rate peaked at just 6.4 percent. During the recessions and recoveries of the 1980s and 1990s, the unemployment rate peaked at 10.8 percent and 7.8 percent, respectively. So, it appears that the worst has past.

Several other numbers suggest that the employment rebound is broadening and will continue.

The manufacturing workweek increased by twelve minutes over the month and has risen by forty-two minutes since July. Factory overtime also has risen in recent months. These developments may suggest that manufacturers will soon begin hiring more workers as they become convinced demand is strong.

Based on the payroll survey, the pace of job losses in manufacturing has eased in recent months. After several months of depressing news in the manufacturing sector, this is evidence of stabilization in manufacturing employment.

I think, and many economists agree, that tax relief is driving this recovery. When people get to keep their own money, their spending decisions are far better for our nation than Washington’s (or Harrisburg’s).

I remain cautiously optimistic. I know that there is still work to be done. But as we turn the corner of this economic slowdown, I expect the recovery to create new opportunities for all Pennsylvanians.

Congressman Joe Pitts represents the 16th Congressional District of Pennsylvania.