The nation's soft employment market makes President Bush's upbeat economic forecast a hard sell in states that have lost thousands of jobs since he took office.

Still, the president is carrying an upbeat message about the U.S. economic recovery to Kentucky and North Carolina on Thursday where he's also raising hundreds of thousands of dollars for his re-election effort.

Bush is having a discussion on the economy at a family owned, pipe-making company in Louisville, Ky., and is visiting Piedmont Community College in Charlotte, N.C. He'll attend fund-raisers at both stops.

The president's trip comes a week after he distanced himself from White House predictions that the economy will add 2.6 million jobs this year. The economy has lost 2.2 million payroll jobs since Bush took office, the worst job-creation record of any president since Herbert Hoover.

The administration's economic forecast predicted that payroll jobs would average 132.7 million a month this year, but to achieve that average, the economy would have had to create more than 2.6 million jobs in coming months, which is unlikely.

While the unemployment rate has been falling and payrolls growing modestly in recent months, the 8.3 million Americans who were out of work last month continues to be a sensitive political issue for Bush the re-election race begins to gain steam.

At Thursday's events, Bush is expected to use parts of his new political stump speech in which he says the Nov. 2 election presents a choice between his administration and its desire to make tax cuts permanent — a move he says would help keep the economy humming - and a Democratic administration, which Bush says would raise taxes.

ISCO Industries (search), the Louisville company hand-picked as Bush's backdrop for a pep talk on the economy, has experienced strong growth in sales and employment. Its top executive credits the uptick to Bush's tax cuts. Company President Jimmy Kirchdorfer said Wednesday that sales and employment are up 50 percent in the past two years, thanks to the tax cuts.

Like many operators of other small and medium-sized businesses, ISCO's owners pay individual income taxes on company earnings. Tax cuts enabled ISCO's owners to channel more money back into the company, Kirchdorfer said.

"It's allowed us to keep more money in the business and buy a lot of equipment and hire people," he said in a telephone interview.

But a top labor leader in Kentucky said Bush has presided over an economy that has been "hemorrhaging" manufacturing jobs — 25,000 in Kentucky alone since Bush became president.

"We think Bush gets a failing grade for his economic policies," said Bill Londrigan, president of the Kentucky State AFL-CIO (search). "There's really nothing good to say about the Bush economy from the perspective of working families."

In North Carolina, more than a dozen organizations are working with Public Citizen (search), a consumer advocacy group based in Washington, to protest Bush's fund-raiser. Demonstrators say they will note that instead of visiting with the more than 100,000 North Carolina residents who have lost their jobs during Bush's first term, the president is attending a $2,000-a-plate fund-raiser at the Charlotte Convention Center.