Dec. 5 (Bloomberg) -- President George W. Bush, who two weeks ago opened a new effort to answer critics of the Iraq war, is beginning an offensive to allay concerns on another front: the economy.

Bush and his aides plan a series of speeches, starting with the president's appearance today at a North Carolina factory, aimed at persuading Americans that their sour view of the economy is out of synch with the underlying realities.

While Bush can point to 10 quarters of steady economic growth and 215,000 jobs created in November, the public view reflected in recent polls is downbeat. And some analysts, noting that price increases are outpacing wages, say there's a basis for the public concern.

``If you ask the classic Ronald Reagan question `Are you better off now than you were four years ago?' a large number of Americans are in fact not better off,'' said Michael Mussa, a member of Reagan's Council of Economic Advisers from 1986 to 1988.

Mussa's assessment is reflected in the ``misery index,'' a combination of the rates of unemployment and inflation, which reached a 12-year high of 9.8 in September as energy prices escalated. That's above the level of 7.8 when Bush took office and higher than the average of 8.7 during the past two decades.

`Business is Booming'

Bush spoke today to about 100 hand-picked workers at Deere- Hitachi Construction Machinery Corp., an American-Japanese joint venture in Kernersville that served as a backdrop for his message that his policies are working and U.S. workers are competing well in the global market.

``The economy is strong, business is booming and the people in this country are working,'' Bush said. ``Fortunately, I didn't listen to the pessimists about tax cuts; the tax cuts are working.''

Bush stepped up his defense of his Iraq policies after Representative John Murtha of Pennsylvania, a Democrat with close ties to the military, called Nov. 17 for the withdrawal of U.S. troops. Now, he will increasingly spend time touting the economy's strength, as will members of his Cabinet, White House spokesman Scott McClellan said.

Commerce Secretary Carlos Gutierrez and Treasury Secretary John Snow, who joined Bush in North Carolina, will make speeches promoting the economy later this week in Washington and Atlanta, McClellan said. Other Bush advisers will enter the fray as well.

``I should be spending more time with all of you talking about how the economy is doing,'' Al Hubbard, director of Bush's National Economic Council, told reporters in Washington Dec. 2.

Broad Strategy

The economy's growth will be part of a broader Republican strategy. ``We'll be echoing that message through every medium available to us,'' said Danny Diaz, a spokesman for the Republican National Committee.

At stake for Bush and his fellow Republicans is whether they will receive credit -- or blame -- in the November 2006 congressional elections for an economy that has some people feeling good and others worried.

The public's sour attitude toward the economy is palpable: 63 percent of those responding to a recent American Research Group Inc. poll characterized the economy as ``bad,'' ``very bad'' or ``terrible.'' Forty-three percent of the 1,100 adults polled Nov. 19-22 said the economy was in a recession, even though it has been in expanding since November 2001.

Pessimism

Sixty-one percent expect the economy to be worse in a year and 17 percent expect it to be better, according to the poll, which had an error margin of plus or minus 3 percentage points.

Bush's tax and spending policies, combined with the expansion of global trade, may be contributing to Americans' malaise, said Harvard economist Kenneth Rogoff, former chief economist for the International Monetary Fund.

``There's been this huge redistribution going on from workers to holders of capital,'' he said. ``So individuals may not feel like the economy is booming in their world.''

The war in Iraq also makes it tougher for Bush to reassure Americans, said Harvard economist Greg Mankiw, chairman of Bush's Council of Economic Advisers from 2003 to 2005.

``The perception that things are going badly in Iraq often makes people think that this economy is doing badly even when it's not true,'' he said.

Republicans want Americans to focus on evidence the economy remains robust. The 215,000 jobs created in November, the most since July, reported by the Labor Department on Dec. 2, amount to four times the average of 51,000 jobs added monthly during a four-year expansion.

``To have this kind of job creation is truly remarkable,'' Hubbard said at a White House press conference Dec. 2.

Uneven Recovery

The economy grew at a 4.3 percent annual rate from July through September, the quickest since the first quarter of last year. The White House estimates the economy will expand 3.5 percent this year and 3.4 percent in 2006.

Yet a closer read of some of the numbers shows the economy's recovery is uneven. While the plant Bush is visiting today has tripled its workforce to 1,000 over four years, North Carolina has lost 173,000, or 23 percent, of its factory jobs since he took office in 2001.

Consumer prices in the 12 months that ended in September were up 4.7 percent, the biggest year-over-year increase since June 1991. In the same period, hourly wages adjusted for inflation fell 2.7 percent, the biggest yearly drop since March 1991.

Poverty Levels

The number of Americans living in poverty rose last year by 1.1 million to 37 million, a six-year high, the U.S. Census Bureau said. For those who can afford it, workers' health-care costs have almost doubled since 2002 to about $3,136 a year, according to a survey released last month by Hewitt Associates, an employee-benefits consulting firm.

Mussa, now a senior fellow at the Institute for International Economics in Washington, forecasts economic growth next year will slow to about 3 percent, as energy costs remain higher than usual and appreciation in housing values slows. The result: Consumers already worried about health care and retirement costs will rein in spending.

``If my economic forecast is right, that we're going to see a significant slowing of real consumption spending growth, more like 2 percent to 2.5 percent than 3.5 percent to 4 percent, then I think that's going to make people feel not particularly happy,'' Mussa said. ``If that does happen, it's not a positive development for Republicans.''

To contact the reporters on this story: Brendan Murray in Washington at brmurray@bloomberg.net

Last Updated: December 5, 2005 15:26 EST