WASHINGTON – President Bush was clearly pleased with the surprisingly good economic news — a first quarter report that says the United States economy grew at 5.8 percent.
The number is an indication that the American economy has weathered the terrorist attack and rebounded quickly.
"That's a very encouraging sign for American workers and American families. Yet, as encouraging as this number is, I am not content," Bush said during a news conference at his Crawford, Texas ranch.
When the slowdown started last year, businesses had more products than they could sell, so factories slowed down and growth fell.
But at the end of last year, businesses unloaded most of the goods gathering dust in warehouses, and as consumers continued to spend, factories had to make new goods for them to buy.
That's what is responsible for the huge growth in the first three months of the year, a welcome sign but only a temporary boost, the president conceded.
"This means that the impetus behind growth won't last very long, that we must continue working to make sure this short-term recovery is a long-term recovery," he said.
He proposed doing so by having Congress make tax cuts permanent, finish an energy bill, and give him trade promotion authority, making it easier to negotiate free trade deals.
"And also, to make sure that our economy grows, it's important for Congress to hold the line on spending," Bush added.
Analysts say the tax cut and a long series of interest rate cuts that helped housing purchases and other areas of the economy are behind the rebound.
Little more than a year ago, the economy had gone from 1.3 percent growth to three-tenths of a percent of growth to a minus 1.3 percent last summer before heading back up first to 1.7 percent last quarter and now to 5.8 percent.
Officials say the economy won't keep expanding that fast, but will grow the rest of the year by about 3.5 percent.
Analysts caution, however, that job creation takes several months to catch up with the rest of the economy.
"What we'll see is jobs will be the last part of the recovery we see. We'll probably not see unemployment drop until the summer, possibly late summer, however it will happen as long as the economy continues to grow," said Brian Reidl, an economist at the Heritage Foundation.