Bush: U.S. economy in slowdown, checks on the way

By David Lawder

WASHINGTON (Reuters) - President George W. Bush said on Friday the U.S. economy is in a slowdown but tax rebates that will start hitting consumers' bank accounts next week should help.

Bush spoke as a measure of consumer confidence hit a 26-year low.

"It's obvious our economy is in a slowdown," Bush said in urging taxpayers to contact the federal government about their eligibility for rebates amounting to as much as $600 per adult and $300 per child, depending on their income.

"The money's going to help Americans offset the high prices we're seeing at the gas pump and the grocery store and it will also give our economy a boost to help us pull out of this economic slowdown," he added before leaving the White House for a trip to Hartford, Connecticut.

U.S. Treasury Secretary Henry Paulson told Reuters on Thursday that the government had accelerated its schedule for distributing the rebate payments under a $152 billion economic stimulus package.

The Treasury had planned to start distributing payments in early May but will send nearly 7.7 million direct-deposit payments to Americans next week, Paulson said in an interview. It will pump $50 billion in rebate payments into the economy by the end of May and largely complete the distribution of more than $100 billion in rebates by the end of June.

Bush said the first paper rebate checks would be sent out on May 9. He urged Americans to file their tax returns with the Internal Revenue Service to ensure that they receive a check.

Bush has said the U.S. economy is experiencing a slowdown, but not a recession against a background of slumping housing prices and rising unemployment as well as increasing energy and food prices and continued declines in home prices in many areas.