Pres. Bush: "Our economy has slowed"

March 7, 2008 2:38:46 PM PST
President Bush said Friday that "it's clear our economy has slowed" and tried to reassure an anxious public that the long-term outlook is good. "Losing a job is painful and I know Americans are concerned about our economy. So am I," Bush said during a hastily arranged White House appearance on the heels of a gloomy government economic report.

"I know this is a difficult time for our economy," he said. "But we recognized the problem early and we provided the economy with a booster shot."

Congress passed and Bush signed a stimulus package that will send tax rebates to many families and businesses. But some fear it will come too late -- or that people will use the money to save or pay off debt, rather than go on a spending spree that would boost the economy.

Bush gently urged people to do the latter. "When the money reaches the American people, we expect they will use it to boost consumer spending," he said.

Earlier, the president's top economic adviser said that the nation's economic growth could dip into negative territory for the current quarter. That tracks with the assessments of many outside experts but is the most pessimistic word to come so far from the White House.

"We don't really know whether it will be negative or not," Edward Lazear, chairman of the White House Council of Economic Advisers, told reporters at the White House. "We have definitely downgraded our forecast for this quarter."

The flurry of activity came as the White House tried to brighten perceptions of the economic picture, clouded by the release earlier Friday of a report showing the economy lost 63,000 jobs last month, the most in five years.

Lazear would not discuss whether the White House is predicting the economy will actually fall into a recession. Some economists think it already has.

"I'm still not saying that there's a recession," Lazear said. "We are going to have a weak growth quarter, and whether you call that a recession or not is something that we won't know for many months."

He said the White House predicts jobs numbers will pick up by spring and growth will rebound by summer, driven primarily by the stimulus package.

"This quarter will be our weakest quarter," he said. "There are indicators suggesting that growth will pick up and pick up quickly. So the question is how quickly will it pick up."

He highlighted what he said was the good news in Friday's jobs report: that the unemployment rate dipped, wages grew and weekly hours stayed the same. However, the jobless rate fell to 4.8 percent in February from 4.9 percent because so many people left the labor force, perhaps discouraged by the difficulty of finding work. And average hourly earnings for jobholders rose only an anemic 0.3 percent from the previous month.

"Obviously we were disappointed," Lazear said about the job losses.

Bush focused even more on optimism than his adviser. "Our economy will prosper," the president said.

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