Uneven Economy Drives Democratic Anger at Bush

WASHINGTON – The nation's unemployment (search) rate fell one-tenth of a percent in August, but a deeper look shows a more troubled picture for the recovering economy — employers were still cutting jobs last month.

President Bush said Friday that he is optimistic about future growth but took note of the new figures showing that the unemployment rate dropped only marginally, from 6.2 percent to 6.1 percent, while companies continued to cut payrolls for the seventh month in a row. Employers said they had 93,000 fewer jobs to offer in August.

"There are still people looking for work, the economy's growing, home building is strong, people are getting more confident, purchases, factory orders for heavy machinery is good and it's up, but people are still looking for work. One of the reasons why is when you're coming out of slow times, that job creation is the last thing to arrive on the scene," Bush said during a speech in Indianapolis, his third in the last five days.

At a Labor Day speech in Ohio on Monday, Bush announced that a Commerce Department assistant secretary post was being changed to focus on revitalizing the manufacturing sector, a decision that earned him derision from Democrats.

"The president needs to do more than run out to Ohio and say, 'Everything's going to be okay, we've turned the corner because the stock market is okay.' You need to actually do something that is going to put people back to work," said Sen. John Corzine, D-N.J.

"Repackaging the same old failed ideas will not generate new jobs. Americans ... are demanding real solutions, like tax credits to encourage American manufacturing jobs and a child tax credit that benefits every parent. These solutions can make a real difference to jump-start our economy," said Senate Minority Leader Tom Daschle, D-S.D..

The nation has lost about 2.7 million jobs since Bush took office. Administration officials say they are determined to fix the problem.

Labor Secretary Elaine Chao (search) told Fox News that Friday's drop in unemployment is positive news even if it seems minimal.

"Obviously, we remain very focused on the employment situation. What we are finding is that the economy is improving, the recovery is improving, in fact all leading economic indicators point in that direction. And the trend lines are very positive, but we are finding the job creation is not as robust as we would like," Chao said.

Economists say the most troubling aspect of the job market is that manufacturing jobs continue to slip away, many of them overseas. Some reports estimate 5 million jobs — many high-paying — will be lost to other countries by 2015.

"It hasn't been a pretty picture for manufacturing for the last three years for a lot of reasons," said Michael Baroody, executive vice president of the National Association of Manufacturers (search). "[We] have good reason to believe from discussions with the administration ... [that] there will be focused attention on real needs of manufacturing, which among other things require that we get a handle on the ever-growing cost of doing business in this country."

The White House is hoping that prediction is accurate for many reasons, including political ones. With the presidential campaign season heating up, the timing of a future recovery will be important for the president.

Some polls show the economy is the top concern among those most likely to vote in 2004, even more so than terrorism and the war in Iraq.

Some analysts say getting people back to work will be crucial to a re-election effort.

"I think the Bush administration needs all of the job indicators, unemployment, actual payroll to be heading upward for him to have an upward pointing arrow in his prospects for re-election," said Forbes Washington Editor Jeff Birnbaum. "In terms of the economy, if it is a jobless recovery, that will make people feel uneasy, insecure and not as eager to vote for the incumbent president."

Fox News' Steve Centanni contributed to this report.