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Two million people have lost their jobs since President George W. Bush got his. Last week's report that unemployment in June jumped to 6.4%, from 6.1% in May, left economists debating whether the economic recovery is really as close as advertised. A survey of forecasters by the Wall Street Journal predicts an above-average 3.7% economic growth rate for the rest of the year. But that may not be enough to cut unemployment substantially, especially given the reluctance of companies to hire. In fact, workers are demonstrating far more faith in the recovery than employers. One reason for June's jobless jump is that more folks were job hunting (in the government's accounting, those who stop looking for work aren't unemployed), which meant there were more job seekers to be disappointed. "The job market will recover, but very slowly, because businesses lack confidence in the strength of the recovery and they do not want to hire prematurely," says Donald Straszheim, a West Coast forecaster.

There are some signs of recovery, especially in the service sector, which accounts for 80% of U.S. employment. Although the economy has shed 394,000 jobs since the end of January, the S&P 500 index is up nearly 8.5% so far this year, and the lowest interest rates since 1958 are keeping the housing market strong. But by Straszheim's bearish reckoning, full-year growth for 2003 may amount to little more than 2%. That could pose a problem not just for workers but also for President Bush as he gears up for the 2004 election. If things don't improve, he could be the first President since Herbert Hoover to record a drop in the number of working Americans during his whole term.

• Adam Zagorin