by Mark Silva

The White House acknowledged this week that the growth in the nation's economy this year -- with 0.6 percent growth in the Gross Domestic Product recorded during the first quarter of this year, the same as the last quarter of last year -- is "nothing to crow about.''

Americans can do better, Bush said in St.. Louis.

Today, the president is taking it a step further, talking about growth for growth's sake: After all, this is not a recession yet, by the traditional definition of the term.

"America is now facing a tough economic period, but our long-term outlook remains strong,'' Bush says in his weekly radio address today. "This week we saw evidence that our economy is continuing to grow in the face of challenges.

"This should come as no surprise. No temporary setbacks can hold back the most powerful force in our economy -- the ingenuity of the American people. Because of your hard work and dedication, I am confident that we will weather this rough period and emerge stronger than ever.''

See the full address here:

by Mark Silva

President Bush was on the road today talking about the economy - the one that grew by 0.6 percent in the first quarter of the year, the same GDP growth recorded in the last quarter of 2007.

"That's not good enough for America,'' Bush said at an appearance in St. Louis today. "It's positive growth, but we can do better than that.''

The president also had to deliver bad employment news today: With 20,000 more jobs lost last month, yet the unemployment rate easing back a notch to 5 percent.

"That's a sign that this economy is not as robust as anybody would like it,'' the president said - not the kind of message that Bush is happy about delivering on the road in this election year.

"Since I've been your president, I want to remind you, we have been through a recession, we have been through a terrorist attack, we have been at war,'' Bush told his audience in Missouri. "But this economy's going to come on. I'm confident it will.''

The Federal Reserve Building, Washington, D.C. Photo by Joshua Roberts/Bloomberg News

by Frank James

Federal Reserve policymakers sound like they're going taking a break, at least after today, from lowering the key short-term interest rates they control.

In their statement released today, members of the Federal Open Market Committee, who dropped a key rate by 25 basis points to two percent, strongly signaled in Fedspeak that they've probably done enough in recent months to goose the flagging economy.

The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time and to mitigate risks to economic activity. The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability.

Fed officials weren't exactly saying they wouldn't drop rates futher, but they certainly sounded like they were moving from an activist posture to what doctors would call watchful waiting. Still, they're clearly leaving open their options should the economy worsens.

But they also are clearly running out of ammunition, with the federal-funds rate, what banks charge each other for overnight loans, getting closer to zero percent, which is basically free money, than the central bank would like, especially since inflationary forces are at play in the world, which the Fed duly noted:

Although readings on core inflation have improved somewhat, energy and other commodity prices have increased, and some indicators of inflation expectations have risen in recent months. The Committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization. Still, uncertainty about the inflation outlook remains high. It will be necessary to continue to monitor inflation developments carefully.

by Mark Silva

The White House -- happy to have averted a recession for now, in either word or definition - acknowledged today that the 0.6 percent growth in the nation's Gross Domestic Product during the first quarter is "nothing to crow about.''

"The first quarter GDP remained slow, but growing,'' Dana Perino, the White House press secretary, said this morning. "This is nothing to crow about. It is very slow growth, but it is growth nonetheless... These numbers are nothing to crow about.... 0.6 percent is not robust growth, by any stretch of the imagination.''

The White House also maintains that President Bush acted on the problem early, seeking measures to counter a home mortgage foreclosure and pushing an Economic Stimulus Act that started delivering more than $100 billion in tax rebates this week.

And White House spokeswoman Perino insisted today that as hard as the press attempts to prod Bush into acknowledging that a recession already is under way - "I feel prodded,'' she said today -- he will continue to deal with the facts as they unfold.

Rising gas prices are among the pressures behind a slowdown in consumer spending during the first quarter - it rose by just 1 percent. Bush had said this week that he would remain open-minded about proposals for a moratorium on the federal gas tax this summer. But the move for that in Congress includes a proposed "windfall profits tax'' on the oil companies --- and the White House is not open to that idea.

"If you are providing disincentives to companies to go out and find more oil... you are shooting yourself in the foot,'' Perino said. ''A tax on specific companies like that would end up dis-incentivizing those companies... One of the things we have to do is allow companies to invest in America and to try to find oil here.''

by Mark Silva

The "economic slowdown,'' as President Bush calls it, has not turned negative yet. The nation's Gross Domestic Product grew by a meager 0.6 percent during the first quarter of the year, the Commerce Department reports this morning.

That equaled the sluggish growth of the final quarter of 2007, which means that, rather than two consecutive quarters of retraction in the economy - spelled "recession'' - the nation has racked up two quarters of lackluster growth.

Economists still are predicting an actual slowdown during the second quarter, April through June. Signs of that can be seen within the last quarter's measure of the value of all goods and services produced within the United States: Builders cut spending on housing projects during the first quarter by 26.7 percent.

American consumers, whose spending drives the economy, also grew more cautious during the first quarter, with spending up 2 percent - the slowest rate since the second quarter of 2001, during the last official recession. Nearly one-quarter million jobs were lost during the first quarter, with the unemployment rate rising to 5.1 percent.

"The average person doesn't really care what we call it,'' the president said yesterday in the Rose Garden, asked why he is reluctant to mouth the word, recession. "The average person wants to know (why) they are paying higher gas prices and paying more to stay in their homes.... These are tough times... The economists can argue over the terminology... The American people know it.''

The Bush administration is counting on its $168 billion economic-stimulus package -- with tax rebates that started depositing into bank accounts on Monday -- to help spur spending during the second quarter. And the Federal Reserve today is expected to cut another key interest rate to 2 percent.

by Matthew Hay Brown

Senate Majority Leader Harry Reid will give President Bush this much: He's one of a kind.

"Only President Bush could allow Big Oil to write our nation's energy policy, guarantee billions in oil tax breaks and refuse to stand up to OPEC or crack down on price gouging, and then shirk responsibility for gas prices that have more than doubled and oil prices that have quadrupled since he took office," the Nevada Democrat said today. "Only President Bush could be surprised to learn that gas was approaching $4 a gallon and then claim the White House is concerned about high gas prices."

Reid was responding to Bush's press conference this morning, during which the president said it was the Democratic Congress that was standing in the way of his efforts to restrain rising prices at the pump.

"One of the main reasons for high gas prices is that global oil production is not keeping up with growing demand," Bush said. "Members of Congress have been vocal about foreign governments increasing their oil production; yet Congress has been just as vocal in opposition to efforts to expand our production here at home.

"They repeatedly blocked environmentally safe exploration in ANWR," Bush said. "Congress has repeatedly blocked efforts to expand capacity and build more refineries. ... Congress continues to block provisions needed to increase domestic electricity production by expanding the use of clean, safe nuclear power."

by Mark Silva

President Bush, asserting that he is both aware and concerned about the rising price of gasoline, offered a solution today that offers no immediate relief and in fact may remain a long way from approval on Capitol Hill: Oil exploration in Arctic preserves.

Acknowledging at the opening of a Rose Garden press conference that gas prices have shot up by nearly $1.50 per gallon in a year, the president suggested that drilling for oil in the Arctic National Wildlife Refuge offers the United States its best hope of boosting oil production and eventually cutting the price of gas.

"There are a lot of reserves to be found in ANWR... That's a given,'' Bush said in his press conference this morning - two months after he held another press conference in which he expressed surprise at a reporter's question that the average price of gas might be approaching $4 per gallon, and many weeks into a presidential campaign in which candidates of both parties are proposing temporary gas tax relief as a break.

The president, saying he is open to looking at a summer moratorium in the 18.4-cent-per-gallon federal gas tax and other solutions, declined to go further on a tax-relief plan that presidential candidates - Sens. Hillary Clinton and John McCain - are backing.

"I appreciate your trying to drag me into the '08 race,'' said Bush, who backs McCain in the '08 contest, insisting that he is sincere about finding a long-term solution for the cost of energy. "The American people have got to understand that, here in the White House, we're concerned about high gas prices.

"If there was a magic wand to wave, I'd be waving it, of course,'' the president said, standing beneath an overcast sky on a chilly morning outside the Oval Office. "If there was a magic wand, I'd say, 'Drop price...' There is no magic wand right now.''

Bush, who has refused to acknowledge that the American economy might be in recession, said he had not had a preview of Gross Domestic Product figures tomorrow which may answer that question - with two consecutive quarters of economic slowdown representing a recession.

"It's a tough time for our economy... Many Americans are understandably anxious,'' Bush said, insisting that people are looking to Congress for action and 'all they are getting is delay....

"The average person doesn't really care what we call it,'' the president said. "The average person wants to know (why) they are paying higher gas prices and paying more to stay in their homes.... These are tough times... the economists can argue over the terminology... The American people know it.''

By David Nitkin

The White House has abruptly announced a news conference in the Rose Garden at 10:31 a.m. today -- giving reporters less than two hours to prepare their questions for President Bush.

Bush will launch the news conference with an 8 minute statement, the White House says, "regarding Americans' understandable anxiety about issues affecting their pocketbooks."

According to the press office, "He will also call upon Congress to send him sensible and effective bills that will help Americans weather this difficult period and keep our country moving forward.

He will specifically reference:

1. Energy prices - Congress should pass legislation which would clear away obstacles to more affordable, more reliable energy here at home.

2. Rising food prices - Congress should reform our farm programs by passing a fiscally-responsible bill that does not impose new burdens on American consumers.

3. Mortgage payments - Congress should pass specific legislation that will help more families stay in their homes.

4. Student loans - Congress should give the federal government greater authority to buy federal student loans."

by Matthew Hay Brown

Today is the 25th anniversary of "A Nation at Risk," the blue-ribbon study commissioned by the Reagan administration that sounded alarms about the state of the U.S. education system.

"The educational foundations of our society are presently being eroded by a rising tide of mediocrity that threatens our very future as a nation and as a people," one oft-cited passage warned. "If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war."

Issued in the midst of the Cold War, and at a moment when America's economic dominance appeared to under threat by a rising Japan, it was the report that launched a thousand school reform programs.

"The most important legacy of 'A Nation at Risk' was to put the quality of education on the national political agenda - where it has remained ever since," Edward B. Fiske writes in The New York Times. "The last 25 years have seen a succession of projects and movements aimed at increasing the quality of American primary and secondary schools: standards-based reform, the 1989 'education summit' that set six 'national goals' for education, the push for school choice and, most recently, the No Child Left Behind legislation. Proponents of each have taken pains to portray themselves as the heirs of 'A Nation at Risk.' "

George F. Will, in The Washington Post, calls much of the effort misguided. He recommends an earlier study, the Coleman report of 1966, which "concluded that the qualities of the families from which children come to school matter much more than money as predictors of schools' effectiveness.

"The crucial common denominator of problems of race and class - fractured families - would have to be faced," Will writes. "But it wasn't. Instead, shopworn panaceas - larger teacher salaries, smaller class sizes - were pursued as colleges were reduced to offering remediation to freshmen."

Fiske warns that "the report's desperate language may be more justified than ever."

House Speaker Nancy Pelosi on Capitol Hill in Washington, Friday, April 25, 2008. (AP Photo/Susan Walsh)

by Matthew Hay Brown

With the Treasury set to send out the first of the tax rebate checks next week, congresisonal Democrats are talking about more relief for American families.

"The strain of the economic downturn on middle- and low-income families demands, in my view, consideration of a second stimulus package," House Speaker Nancy Pelosi told reporters today. "And we have begun some conversations with the administration and the Republicans on that."

But the proposals Democrats are pushing will be a more difficult sell than the so-called recovery rebate, which lawmakers passed quickly this year with bipartisan support. Republicans already have rejected Democratic proposals to expand children's health insurance, extend unemployment insurance and boost investment in infrastructure.

"It's obvious our economy is in a slowdown," President Bush said today. But the White House has been cool to a second stimulus package before the first package has a chance to work its economic magic.

by Mark Silva

When President Bush first proposed a tax rebate for Americans earlier this year, he billed it as a shot in the arm for the economy.

Today, he suggested the money will simply help people pay their rising bills for gas and food.

With a statement from the South Lawn this morning, Bush said of those payments that will start showing up in direct-deposits on Monday and start arriving by mail on May 9: "This money is going to help Americans offset the high prices we're seeing at the gas pump and at the grocery store, and it will also give our economy a boost to help us pull out of this economic slowdown.''

But the gas price problem is worse than Bush is acknowledging, insists House Speaker Nancy Pelosi (D-Calif.)

" It's almost three times what it was when President Bush took office... It was a dollar something when he took office,'' Pelosi said in an interview with CNN's Larry King. "It's higher where I'm from in California, sad to say...

"What we've tried to say to the president.... We have to think short-term and long- term on it... I called on the president to not increase the oil in the Strategic Oil Reserve... At the time of Katrina, he released oil from it.... We're just saying, don't increase it, increase supply, let that go into the market.''

The White House maintains that the Strategic Oil Reserve is not a tool for market manipulation. More domestic drilling is what's needed, Bush says -- and that is clearly a long-term issue.

by Mark Silva

The checks will be in the bank on Monday -- for those who receive their IRS refunds by direct deposit, President Bush said today that the Treasury Department will start delivering the first 7.7 million of the "Economic Stimulus Act'' tax rebates on Monday.

The rest will start hitting the mail on May 9 -- with some 130 million households in line for the $600-per-individual, $1,200-per-couple and $300-per-eligible-child in rebates that Congress has approved at the White House's prompting as a boost for a slowing economy.

"If you've already filed your income tax return, your rebate is on the way,'' Bush said today on the South Lawn of the White House, encouraging people who haven't finished their taxes to file. The rebates, authorized under the Economic Stimulus Act of 2008, will come whether or not a tax filer owes taxes or is receiving a separate return.

"We want to make sure everyone who is eligible for a check gets one,'' Bush said. "This money is going to help Americans offset the high prices we are seeing at the gas pump and the grocery store... and will also give the economy a boost to help us out of this slowdown.''

Economists say the checks will have only a modest impact on the economy, if people spend the money -- as the administration is encouraging people to do. They say that the roughly $150 billion in tax rebates and tax incentives for businesses included in the act may make an anticipated recession only somewhat more shallow.

Bush insists there is no recession yet -- only a "slowdown.''

But direct-deposit was clearly the way to go here: Those bank-desposited rebates are all promised by May 16. The mailed checks starting in May will continue through June and into July. According to the IRS, direct deposits and mailed checks will flow in the sequence of taxpayers' Social Security numbers.

Home-budgeters, see the schedule here:

by Mark Silva

My cell phone rang in the Rose Garden the other day. It was my daughter calling.

Having already violated the no-ringers-please policy at presidential press conferences, I quietly text-messaged her: "Can't talk. In the Rose Garden with the president.''

"Tell him to cut the gas prices,'' wrote back my daughter, a college student and mother of one whose weekly budget has been busted by the cost of filling up the tank.

I thought of this today as oil reached another record high of $116.69 per barrel at the closing price. And I thought of the president's response when asked about the prospect of $4 per gallon gasoline at another recent press conference. "I hadn't heard that,'' President Bush replied, somewhat startled.

Well, as gas approaches $4 per gallon this spring, and oil prices keep spiraling, we could be hearing of much worse gas prices this summer. I'll be talking about that weekly budget with my daughter, it seems. She may be doing a lot more walking.

by Frank James

President Harry Truman famously said what he needed was a one-handed economist to avoid the profession's tendency towards "on one hand, on the other hand" messages. But that doesn't address the situation where get two economists pointing in opposite directions.

Today's consumer price index report for March from the Labor Department either means inflation may be moderating or it may be ready to surge forward, depending on whom you believe.

The overall CPI rose 0.3 percent for the month, while core inflation, which subtracts food and energy prices from the index, rose 0.2 percent.

The annualized rate for total inflation for the last three months was 3.1 percent compared with the unadjusted 4.0 percent for the 12 months ended in March. Excluding food and energy, the annualized rate for the three months ending in March was 2.0 percent; the rate for the trailing 12 months was 2.4 percent.

Now, this looks like good news, like inflationary pressure just might be slowing. That's certainly the interpretation of the data offered by Bernard Baumohl, an economist and managing director of the Economic Outlook Group in Princeton, N.J.

By digging into the CPI data we think a credible case can be made that inflation is behaving as expected in a recession and starting to moderate. Pricing power becomes increasingly difficult to maintain when there is a slowdown in demand. Inflation may thus be approaching a critical inflection point, though we’ll need a few more months of data to be certain.

by James Oliphant

Here's another sign that the economy perhaps is bottoming out.

Bankruptcy filings in federal court increased 38 percent in 2007, to more than 850,000 people nationwide, the administrative office of the U.S. courts said Tuesday.

That's significant because the numbers dropped precipitously in 2006 following passage of the Bankruptcy Abuse Prevention and Consumer Protection Act, which made it more difficult for individuals to discharge their debts.

After that act was passed by Congress, filings fell 70 percent. Some of that was attributable to some filing before the act became law in October 2005. That year saw some 2 million bankruptcy filings.

Perhaps tellingly, filings involving business debts, as opposed to consumer debts like credit cards, saw the greatest increase. Those spiked 44 percent in 2007.

by Frank James

There's some thinking that the U.S. economy might be able to weather the current economic downturn thanks to exports. Maybe. But the International Monetary Fund has a report out today that makes it appear that exports may not be able to significantly prop up the U.S. economy.

In its report on the global economic outlook, the IMF indicates that the crash in the U.S. housing market, as well as the meltdown of credit markets, will put the brakes on the world economy's growth.

Indeed, the fund's economists say there's a one in four chance of a world recession in the 2008-2009 time period.

In a press release on the report, the IMF said:

Global growth will decelerate in 2008, led by a sharp slowdown in the United States, amid a housing correction and a financial crisis that has quickly spread from the U.S. subprime sector to core parts of the financial system, the IMF says in its latest World Economic Outlook.

Citing the unfolding financial market turmoil as the biggest downside risk to the global economy, the April 2008 report said the IMF expects world growth to slow to 3.7 percent in 2008—0.5 percentage point lower than what was forecast in the January 2008 World Economic Outlook Update.

Further, world growth would achieve little pickup in 2009, and there is a 25 percent chance that the global economy will record 3 percent or less growth in 2008 and 2009, equivalent to a global recession.

by Frank James

Today's very bad jobs report--the economy lost 80,000 jobs in March--is going to make it much harder for certain policymakers (an image of President Bush just came to mind) to keep up appearances that the economy isn't in recession.

The job losses, the largest in five years, were greater than many economists expected and it was the third consecutive month of job losses to boot. What's more, the reduced payrolls helped push the unemployment rate to 5.1 percent for March, the higest level since September 2005.

It goes without saying that this is really bad news which could further demoralize investors, like they need any more demoralization, and add to weakeness in the financial markets. Not surprising the Dow Jones Industrial Average headed lower when the market NYSE began trading a few minutes ago; stock futures were headed lower too.

On Wednesday, Federal Chairman Ben Bernanke said a "recession is possible," an clearly stated acknowledgement that received a lot of attention.

The payroll numbers scream that a recession may not only be possible but here as employers hunker down amid the credit crunch and all the other uncertainties in the market.

It's looking increasingly likely that the economy has fallen into a hole that all those economic stimulus checks that will soon be going out to millions of Americans won't be able to fill.

Today's jobs report raises the likelihood that Bernanke and fellow members of the Federal Open Market Committee will feel a lot of pressure to once again aggressively cut their key short-term rates when they meet at the end of April.

Their Federal Funds target rate, which serves as a bellwether for many other short-term rates, is now at 2.25 percent with many analysts expecting it to be at 1.75 percent by mid-summer.

The March report certainly demanded the attention of the presidential campaigns and a few statements have come in.