Bush: Tax cuts kick-starting economy
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WASHINGTON (CNN) -- The administration's federal tax cut program is working, President Bush said Saturday, citing leading economic indicators, retail sales and manufacturing orders that suggested a rebounding growth in the economy from April through June.
"The best way to promote growth and job creation is to leave more money in the pockets of households and small businesses, instead of taxing it away," the president said during his weekly radio address. "So we lowered income tax rates, cut taxes on dividends and capital gains, reduced the marriage penalty and increased the child tax credit."
The result, Bush said, is that "we are starting to see results from our actions."
"My administration's economists believe that if we had not passed tax relief, our unemployment rate would have been nearly 1 percentage point higher (than 6.2 percent), and as many as 1.5 million Americans would not have the jobs they have today," he said.
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 This is a pretty negative report. The reason unemployment ticked down is the labor force contracted. 
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-- Jared Bernstein, labor economist at the Economic Policy Institute
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The unemployment rate, released Friday, was down in July from June's 6.4 percent, but it fell mostly because the size of the labor force -- the number of working-age people either working or looking for work -- shrank by 556,000 people in July.
And non-farm payrolls fell by 44,000 jobs in July after losing 72,000 jobs in June. Goods producing and manufacturing jobs took the biggest hit, cutting 67,000 and 71,000 jobs respectively. Temp workers made up the largest gain in jobs.
"This is a pretty negative report. The reason unemployment ticked down is the labor force contracted," Jared Bernstein, labor economist at the Economic Policy Institute, a Washington think tank, told CNN. "That suggests fewer people are getting into the game, looking for work, and that kind of discouragement can lead to a lower unemployment rate."
Manufacturing activity, while still weak, did expand in July for the first time in five months, but the consumer confidence index took a tumble.
"If the job market doesn't kick into higher gear soon, consumers will lose confidence and rein in their spending, and the economy will in all likelihood fall back into recession unless we're very lucky," said Mark Zandi, chief economist at Economy.com.
But Bush's message was optimistic.
"America's economy has challenges, and I will not be satisfied until every American looking for work can find a job," he said. "I have confidence in our economic future, because I have confidence in the people whose effort and creativity make this economy run -- the workers and the entrepreneurs of America."
