Last year, more Americans lived in poverty, more children were poor, and more people lacked health insurance than in 2002.

That message, reported by the US Census Bureau yesterday, was expected, but the increases confirm a troubling trend for the economy and a challenge for the incumbent president in an election year.

The numbers confirm a third straight year in which poverty rose and a gap in health coverage widened. Political analysts and partisans of both political parties rushed to put their stamp on the news.

"This will reinforce the feeling that we've had a very serious recession, and it's still with us," says Floyd Ciruli, a pollster based in Denver. Together with recent headlines about reduced job projections for next year, "I think it plays against the basic message that the president is trying to get across, which is that we've gone through the worst of it."

Still, there were some bright spots in the news, including the fact that the median household income held steady last year, at $43,318, after two years of decline. The percentage of children without health insurance also stayed unchanged - striking given that there was a large rise in child poverty. One factor: More children are being covered by Medicaid and the State Children's Health Insurance Program.

And the picture on income inequality - whether the gap is growing between rich and poor in America - was a mixed one. The primary way of calculating that inequality showed no change, but the income for the poorest Americans - those in the bottom 20 percent - went down, while the income for the wealthiest fifth of Americans went up.

Critics of the Bush administration, however, pointed to the sharp rise in child poverty - from 16.7 percent to 17.6 percent of the under-18 population - in addition to the more gradual rise in overall poverty (up from 12.1 percent of Americans in 2002 to 12.5 percent in 2003).

"It's disappointing ... seeing very little in the way of policy that really addresses turning that around," says Margy Waller of the Brookings Institution who served as a Clinton policy adviser. While the Bush administration has said it wants to change the focus on welfare reform to emphasize the well-being of children, she says, in reality "we're seeing reductions" and plans that undermine the safety net.

Other analysts suggested the numbers might indicate a worse picture than is actually the case. The numbers don't reflect any changes this year, for one thing.

"Compared to prior recessions, the effect here is quite mild," says Robert Rector, a fellow in domestic and economic policy studies at the conservative Heritage Foundation. "And the data show the continuing success of welfare reform." There are more than a million fewer black children living in poverty now than prior to the reform, he notes.

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