With voters more concerned about the US economy than even Iraq, President George W Bush got more bad news Friday as the Census Bureau reported a 1.1 percent drop in median household income last year and an increase of nearly 1.7 million people who were living in poverty.

The latest figures showed the income of middle-class families declining 3.3 percent, or almost US$1,500, since 2000, the last year of Bill Clinton's presidency.

Similarly, the poverty rate has jumped from its all-time low of 11.3 percent under Clinton in the year 2000 to 12.1 percent, bringing the total number of residents living in poverty to almost 35 million, according to the official data.

''It's hard to recognise an economic recovery in these numbers,'' said Jared Bernstein, senior economist at the Economic Policy Institute (EPI), a think tank closely tied to US labour unions. ''The broad-based bite of the jobless recovery in 2002 eroded living standards for families at all income levels.''

Additional evidence

Democratic candidates, who have been hammering Bush for weeks for being the first president since Herbert Hoover (1929-1933) to have overseen the net loss of jobs during his term in office, were quick to jump on the new statistics as additional evidence of poor economic policies. Some three million jobs have been lost since Bush took office in January 2001.

''This is sad news that the Bush administration is trying to sweep under the rung," said North Carolina Senator John Edwards, one of the 10 declared candidates. ''I'd like to hear President Bush explain to all the single mothers with kids living in poverty how his tax breaks for the rich are helping them.''

Indeed, the latest numbers will make it still more difficult for Bush to persuade voters that the economic recovery that he has touted for most of this year has as much strength as he and the Republicans have been saying. The 2001 recession officially ended almost one year ago, in November 2001.

According to a battery of recent polls, the economy is emerging as the major concern for voters just 13 months before the November 2004 elections, and confidence in Bush's economic policies has fallen sharply over the past six months to the benefit of Democrats.

''President Bush is facing an electorate that is almost as focused on the economy as it was in the fall of 1991, when rising economic concern began to unravel his father's re-election campaign,'' said a study by the Pew Research Centre for the People and the Press, released Thursday.

An accompanying survey found that at this point in the campaign, Bush holds a ''statistically insignificant lead'' over a generic Democrat among registered voters.

'It's the economy, stupid'

At a comparable point in the 1992 election campaign, Bush's father, who had hoped to coast to victory on his Gulf War laurels, dominated the polls, despite the rising anxiety about the economy in what at that time was called a ''jobless recovery''.

''It's the economy, stupid'' became the unofficial slogan that propelled Bill Clinton past Bush senior and into the White House.

The administration and some investors have predicted that the economy will pick up speed in 2004, possibly even surpassing a four percent annual growth rate, but even if it does, the question is whether average voters will feels the impact.

Robert Greenstein, an economist at the Centre for Budget and Policy Priorities, told reporters Friday that he expected next year's report - on income and poverty trends for 2003 - will also be bad news for the administration. That report will be released just six weeks before the presidential elections.

''We would expect that the poverty rate is likely to go up further and income to decline further for 2003,'' he said, noting that the Labour Department has already predicted a decline in average wages for 2003.

The 2002 results announced Friday, he said, were not unexpected, despite the recession having ended last November. Poverty rates and income levels are much more closely tied to unemployment than to the official resumption of economic growth, he said.

According to Greenstein, poverty increases were found in every racial and ethnic category, but blacks, who benefited most from the record economic expansion during the Clinton years, suffered the worst deterioration. Some 24.1 percent of all blacks lived in poverty in 2002, compared to 22.7 percent in 2001.

Similarly, black households saw the largest losses in income - a three percent decline over one year, the Census bureau found.

Poverty rate

Another politically sensitive indicator - poverty rates for children - also rose. More than 12.1 million children were found to be living in poverty last year, compared to 11.7 percent in 2001, with most of the increases hitting black and Latino children.

The political sensitivity derives from Bush's own campaign slogan as a self-described ''compassionate conservative'': 'Leave no child behind'.

''The nation does not have a money problem,'' said Marian Wright Edelman, the president of the Children's Defence Fund (CDF).

''It has a values and priorities problem. Our children are getting poorer while the Bush administration and congressional leaders work to dismantle protections for children to pay for a US$93,500 tax break to millionaires and consider spending billions to rebuild Iraq,'' she said.

The latest poverty data are likely to be used by Democrats and even some Republicans in the coming weeks both to assail Bush's proposal to spend 87 billion dollars on Iraq and Afghanistan in the coming year and to press a growing movement in Congress to at least partially repeal the massive tax cuts that Bush has touted as his major domestic accomplishment.

With the unexpectedly high bill for Iraq and Afghanistan, Congress faces a more than US$400 billion deficit for this year that will be even higher for 2004.

At the same time, polls published this past week show that many more voters prefer to repeal the tax cuts - most of which benefited the wealthiest citizens - as a way to pay for the deficits, rather than to reduce social programmes. - AFP