Dean tries to defeat Bush with weapon of economics

Thursday, June 12, 2003 at 1:00am

Howard Dean, the former Vermont governor and the Democratic presidential hopeful, has given away his party's dirty little secret: They are praying for an economic downturn between now and November 2004.

They reckon that by attacking the Republican's economic policies they can deny President Bush a second term in the Oval Office. "If we re-elect this president," warned Dean, testing out a Democrat campaign theme, "we'll be in a depression."

Unfortunately, the economy is not cooperating with Dean and his fellow Democrats. Just this week, in fact, Federal Reserve chairman Alan Greenspan said he sees indications of a "fairly marked turnaround" in the nation's economy.

Indeed, over the last month the bulls have returned to Wall Street. The blue-chip Dow Jones industrial average is at its highest level in nearly six months. The broader Standard & Poor's 500 index is at its highest level in nine months. And the technology-laden Nasdaq Composite index is at its highest level in nearly a year.

Investors have returned to the stock market because they see harbingers of better economic times to come, like the stronger-than-expected growth for May in the U.S. service sector, which makes up 80 percent of the nation's economy. It was the second straight month of expansion, according to the Institute for Supply Management's index.

There also was the strong May reading on regional manufacturing. The National Association of Purchasing Management-Chicago said its monthly index rose to 52.2. (When the Chicago PMI tops 50, it signals expansion in the manufacturing sector.)

The nation's housing market continues to expand, as sales of new homes rose 1.7 percent in April to a 1.03-million-unit annual rate. That annualized rate is at least the third-highest level ever recorded, according to the Commerce Department.

Of course, not all the leading economic indicators are positive.

Most troubling, perhaps, is that the four-week moving average for first-time unemployment claims has remained above the 400,000 mark

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