Economy in slowdown but recession unlikely: Bush

WASHINGTON Thu Feb 28, 2008 4:35pm EST

1 of 4. President George W. Bush holds a news conference in the White House Press Briefing Room in Washington February 28, 2008.

Credit: Reuters/Larry Downing

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WASHINGTON (Reuters) - The U.S. economy is in a slowdown but not headed into a recession, President George W. Bush said on Thursday after new data showed slow fourth-quarter growth and a bigger-than-expected jump in unemployment claims.

Bush, speaking at a White House news conference, also said he didn't think another economic stimulus package was necessary at the moment, adding "why don't we let stimulus package one have a chance to kick in."

"There is no question the economy has slowed down," Bush said. "I don't think we're headed into a recession, but there is no question we are in a slowdown."

"And that's why we acted, and acted strongly, with over $150 billion worth of pro-growth economic incentives, mainly money going into the hands of our consumers."

New economic data on Thursday showed the slender pace of U.S. growth was unrevised in the fourth quarter and new jobless claims jumped sharply last week, reinforcing a fragile outlook that some fear spells recession.

At the same time, fresh weakness in the U.S. dollar is raising new concerns about rising import prices and inflation even as it helps boost U.S. exports. Bush sought to reassure international financial markets that the administration stands by a strong currency.

"We believe in a strong dollar policy and we believe, and I believe, that our economy has got the fundamentals in place for us to be, to grow and continue growing more robustly, you know, hopefully more than we are growing now," Bush said.

"And the dollar, the value of the dollar will be reflected in the ability for our economy to be -- to grow economically," he added.

Bush also acknowledged the unease many Americans are feeling because of rapidly rising gasoline prices.

"That creates a lot of uncertainty," Bush said. "If you're out there wondering what your life is going to be like and you're looking at $4 a gallon, that's uncertain."

The U.S. dollar fell to a record low against the euro on Thursday on fears that the U.S. economy is heading for a recession.

The government reported on Thursday that gross domestic product, which measures total goods and service output within U.S. borders, rose at an annual rate of 0.6 percent. It was slowed by a collapse in spending on new homes and a slump in inventories, and was slightly weaker than the 0.7 percent pace forecast by analysts polled by Reuters.

A separate release from the Labor Department showed that the number of U.S. workers applying for first-time unemployment benefits rose a much bigger than expected 19,000 last week.

(Additional reporting by Donna Smith; editing by Lori Santos and Jackie Frank)

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