THE RECESSION, it appears, is not yet over. The government published yesterday its first estimate of the gross national product--the measure of the American economy's output--for the spring quarter, and it showed a slight rise. But other figures for June contradict the suggestion of a conventional turnaround and recovery. As the quarter ended, employment and industrial production were falling. Through the spring, the decline was not continuing as rapidly as last fall and winter. But the GNP data do not convey the promise of expansion for which the Reagan administration, and a great many other people, had hoped.
Perhaps it's misleading to speak of a recession. The word has become a habit, and it's a bit dangerous. It brings to mind the kind of business cycle that was repeated six times between World War II and the late 1970s. Each contraction was followed by a surge of growth that went on, typically, for several years, carrying employment and standards of living well beyond the previous peak.
That pattern changed in early 1979. Since then, the pattern has been a succession of weak waves of growth that crest and break prematurely, barely carrying the economy back to its previous peak. The economy, as the GNP measures it, is currently at almost exactly the same level of output as it was in the winter of 1979, 31/2 years ago. In the century since this country became an industrial power, there's been nothing quite like it.
What caused this unhappy change? As the date testifies, it was well established before Mr. Reagan arrived at the White House. There's no widely accepted explanation, but you can safely assume that it had a lot to do with the accelerating inflation, aggravated by the oil crisis of 1979. The issue is not whether the Reagan administration and its idiosyncratic economic theories led the country into zero growth--plainly, they didn't-- but whether they can lead the country out of it.
At this point, the economy remains caught in the same trap Mr. Reagan found it in, and his policies have made it harder than ever to find a solution. The enormous tax cut enacted 11 months ago has created a dismaying prospect of increasingly large budget deficits in the years ahead, and that in turn makes it harder than ever to bring interest rates down. With interest high, economic recovery and growth remain implausible.
When GNP remains at a constant level, as it has since 1979, that does not mean--unfortunately--that each individual American's income also remains constant. Since the population is growing--at, currently, a little over 1 percent a year--in a stagnant economy, income per capita falls. Those are the dilemmas the administration's midyear review of the budget and economic strategy, to appear this week, needs to address.