Will Bush ratings follow slumping economy?

President Bush faces a new political danger in the last place he wanted: the economy.

In the first major economic news since the passage of his tax cut, the nation's unemployment rate has surged to 6.4 percent, a nine-year high, and a level that causes newspaper headlines to swell.

The latest numbers are the highest of the President's term and may make it more difficult for him to continue to blame former President Clinton for the economic downturn.

Unless the economy improves, Bush will have to run on a record of losing jobs - so far 2.5 million. That would give him the dubious distinction of being behind only Herbert Hoover in terms of job losses. Even the divided Democrats are quickly homing in on the economy, and their constant harping could prod voters to forget the quick war in Iraq or other foreign incursions. "He remains quite vulnerable on the economy," says Bruce Buchanan, a political scientist at the University of Texas at Austin.

This is not to say Bush is in immediate risk of losing his job. He remains a popular president, and despite the bad news on jobs, economists are still sticking to forecasts of better growth in the second half of this year, which they expect will be stimulated by the President's tax cuts, as well as continued low interest rates. A Wall Street Journal survey last week found economists are predicting a 3.5 percent annual growth rate in the third quarter and 3.8 percent in the fourth quarter. "That's probably enough growth to keep the jobs picture stable," says John Silvia, chief economist at First Union Bank in Charlotte.

Stability, however, is not what the President had in mind when he campaigned for the tax cut. The President's Council of Economic Advisors estimated that Bush's Jobs and Growth Plan would create 1.4 million new jobs by the end of 2004. "I don't think it will pan out at this point," says Mr. Silvia. "That's the kind of number that comes back to haunt you."

The White House, for its part, says that once the tax cuts kick in, the economy will start to move forward. Labor Secretary Elaine Chao says the higher unemployment rate is a sign that more people are looking for work - largely because they think there are more jobs.

The political effect of the economy on Bush's popularity has been negligible: Bush's approval rating on the economy is lower than his overall rating, but still decent. And despite Democrats' attacks, the economy hasn't really hurt him overall, but this could change.

High unemployment numbers are "bad news for the White House," says Carroll Doherty, editor of the Pew Research Report. "What we've seen is that [Bush's] efforts on the economy are drawing more criticism - in spite of the fact that Congress has approved the tax bill." However Mr. Doherty says the economy could be worse. "The only thing that tempers it is the stock market, which has shown a lot of strength lately."

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