January 4, 2008 / 2:49 PM / 10 years ago

Bush says economy sound; mum on stimulus plan

3 Min Read

<p>President Bush speaks after a meeting with the President's Working Group on Financial Markets in the White House, January 4, 2008. Seated beside Bush from left are Treasury Secretary Henry Paulson, Chairman of the Federal Reserve Ben Bernanke and Chairman of the White House Council of Economic Advisers Ed Lazear.Kevin Lamarque</p>

WASHINGTON (Reuters) - U.S. President George W. Bush said on Friday that the U.S. economy was on solid footing despite a weak employment report, and gave no hint of what his administration may have in store to bolster growth.

"This economy of ours is on a solid foundation, but we can't take economic growth for granted," Bush told reporters after meeting with his so-called Working Group on Financial Markets. "If the foundation is strong, yet indicators are mixed, the worst thing that Congress can do is raise taxes."

His comments came hours after a government report showed U.S. job growth in December was the weakest in more than four years, while the unemployment rate climbed to 5 percent, the highest mark in two years.

The employment data heightened concerns that the U.S. economy may be headed toward recession and sparked a sell-off on Wall Street, but it helped move oil prices off a record peak above $100 per barrel.

Investors were eagerly awaiting any word on what the White House had in mind to help the economy after Bush said in a Reuters interview on Thursday that his administration was considering whether to craft an economic stimulus package.

Bush had said that he probably would not make a decision until his State of the Union address to Congress on January 28. He has been pressing lawmakers to make permanent tax cuts put in place during his presidency.

"We are listening to a lot of good ideas from different people," Bush said in the interview. "We've got our people out there carefully -- not only monitoring this situation -- but listening to ... possible remedies."

'Mixed' Economy

The president's chief economic adviser, Edward Lazear, said on Friday the administration preferred options that were not targeted to a specific sector.

"We are considering a variety of measures. We're not being complacent. We have pushed economic growth policies throughout this administration and we're not going to stop doing that now," Lazear told Bloomberg Television.

In a separate interview with CNBC, Lazear said the drag on the U.S. economy from a deep housing slump should ease by mid-year, paving the way for stronger economic growth.

"The big drain on the economy for the past year and a half has been housing ... eventually that is going to bottom out and when that bottom outs, even if it doesn't expand, it will remove that negative drag on the economy," he said.

The White House noted the employment report showed continued job growth, and said the unemployment rate was still low by historic standards.

"It's a mixed economy. We're seeing mixed data and we're paying close attention to it," White House spokesman Tony Fratto said.

Additional reporting by David Lawder, Emily Kaiser and Tabassum Zakaria; writing by Emily Kaiser; Editing by Tom Hals

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