Disappointing new figures yesterday on employment and factory orders suggested that the US economic recovery has lost steam of late, raising new anxieties for the White House as the November election approaches.
According to the Labor Department, the non-farm economy added 112,000 new jobs in June - the 10th successive monthly increase, but less than half the figure predicted by analysts. At the same time, the government revised downwards new job creation for the two previous months. The overall jobless rate held steady at 5.6 per cent in June, for the third consecutive month.
Addressing business executives at the White House, President Bush insisted that the latest figures proved the economy was "steady and strong". Steady growth was important, he insisted, "we don't need boom or bust growth".
Nonetheless the smaller-than-expected expansion in the jobs market - announced two days after the Federal Reserve raised interest rates for the first time in four years - suggests the economy may be slowing slightly, settling at a rate of 4 per cent or slightly less.
In June, manufacturing jobs fell by 11,000 - a pointer that employers may be growing more cautious about prospects for the second half of 2004. The latest data is bound to give the Democrats new ammunition, reinforcing their charges that Bush economic policies of tax cuts have not only fuelled soaring federal deficits but benefitedbetter-off Americans, without improving the situation of ordinary workers.
A second consecutive monthly decline in factory orders also suggests the economy is slowing. Largely as a result of weaker demand for cars and other durable goods, factory orders fell 0.3 per cent in May, after a 1.1 per cent decline in April.
The economy, as always, will be a crucial factor in the presidential election - but in 2004 more than ever, as public dissatisfaction with the war in Iraq grows, reducing Mr Bush's approval rating to a dangerously low 45 per cent, according to a new poll.
The President would like to point to a strong economic recovery. Even so, Americans believe by a solid margin that John Kerry, his Democratic challenger, would do a better job with the economy than Mr Bush.
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