Bush Finds It Harder to Avoid the 'r' Word

President Bush has given up insisting that the United States can avoid a recession as the nation grapples with soaring food costs, record oil prices and another leap in the number of home repossessions.

At a press conference in the White House's rose garden yesterday, Bush abandoned his denials of a recession and declared that such terminology should be left up to economists. "The words on how to define the economy don't reflect the anxiety the Americans feel," he told reporters. "The average person doesn't really care how we define it. The average person wants to be sure we know they're paying higher gasoline prices and are struggling to stay in their homes."

His remarks came as US consumer confidence fell to a five-year low. An index compiled by the Conference Board slipped from 65.9 to 62.3 in April - its worst since March 2003.

Lynn Franco, director of the board's consumer research center, said the number of Americans planning to take a holiday in the next six months was at a 30-year low. Americans have begun receiving tax refunds this week of up to $600 (£300) a person under a plan agreed by Congress to stimulate the economy.

The retailer Office Depot yesterday revealed a 55% plunge in quarterly profits to $69m as small businesses cut back on stationery and supplies. On the home front, the value of US single-family houses plunged by 13.6% in the year to February, according to the closely watched Standard & Poor's/Case-Shiller index.

"There is no sign of a bottom in the numbers," said David Blitzer, chairman of the index committee at Standard & Poor's. RealtyTrac, a specialist in tracking foreclosures, revealed that the number of US homes undergoing repossession proceedings has reached 650,000 - an increase of 112% on last year.

As the sub-prime mortgage crisis continues to cause havoc, the country's biggest home loans firm, Countrywide Financial, announced a first-quarter loss of $893m and wrote off $3bn in assets and bad loans. The proportion of its sub-prime mortgages in default has reached 35%, compared with 19% a year ago.

Some business people are losing patience with the trend. "This country needs a cleansing," the billionaire property magnate Sam Zell told a financial conference in Los Angeles. "We need to clean out all those people who never should have been in houses in the first place and who for sure shouldn't be getting sympathy," he said.