Kerry Boost As Economy Hints at Slide

America's ailing economy has become central to the battle for the White House, amid growing signs that the country's recovery from recession is stuttering to a halt.

The economy is now seen as a potentially winning issue for Democrat challenger John Kerry, who made it one of the key planks of his campaign speeches as he stumped last week through the Midwest swing states.

Kerry's tactics were given a boost yesterday when a new poll in two key battleground states showed the Massachusetts senator in a healthy lead over President George Bush. The study showed that in the key state of Florida, which decided the 2000 election, Kerry led Bush by 50 per cent to 43 per cent. In New Hampshire, which only narrowly went Republican in 2000, Kerry was ahead of Bush by 49 points to 42, the American Research Group poll showed.

Experts believe that Kerry is benefiting from positive press after staging a successful recent party convention. 'You can logically conclude that the convention brought wayward Democrats back to Kerry,' said ARC president Dick Bennett.

At the same time Bush has been slammed by a wave of bleak news on the economy. On Friday, the government released its latest job creation figures which showed a mere 32,000 new jobs were added to the economy last month. That was way below forecasts which had envisaged at least a quarter of a million new jobs.

The disastrous figures scotched hopes earlier this year that America's economic recovery was roaring along and about to deprive the Democrats of one of their strongest criticisms of Bush's record. Now the opposite appears to hold true.

As well as the job figures, recent weeks have seen a huge slide in the stock market, which now stands at the same level as it did at the start of the year. A huge rise in oil prices has also knocked US consumers as petrol prices have rocketed above $2 a gallon. That might still seem cheap to many Europeans, but in America it is seen as highly expensive and the price of petrol has become a staple complaint.

For the Republican campaign team the grim spectre of the electoral fate of Bush's father is beginning to haunt the campaign. The elder George Bush was ousted in 1992 after just one term by Bill Clinton, as Democrats coined the now famous taunt: 'It's the economy, stupid.'

To drive home the point Kerry's campaign has released a new ad that accuses Bush of sacrificing US jobs in favour of tax breaks for companies that move overseas.

Since Bush took office in January 2001, the US economy has lost a net 1.1 million jobs. In response, Bush's campaign has centred far more on highlighting the issue of national security. Polls consistently show that Bush leads Kerry when it comes to dealing with the war on terror. But that has fuelled claims that Bush is exploiting a terrorism scare which last week saw the threat level raised in New York, Washington and Newark, New Jersey.