The oil prices shooting up to a record $139 a barrel, weakening dollar, rising unemployment and job losses catapulted economy to the top of the US presidential candidates' agenda as the Bush administration considered fresh measures to stimulate it.
Analysts said that if economy fails to improve, Iraq war would be way down among the concerns of the voters when they go to polls in November to select a successor to President George W Bush, who is now facing dismal approval ratings.
As presumptive Democratic candidate Barack Obama and his Republican rival John McCain prepared to launch their campaigns, the economy presented more bad news with some economists predicting that worst might come.
Dow Jones industrial tumbled almost 400 points on Friday as several economists blamed rising oil prices on speculators. With dollar weakening, the speculators are investing in oil which shoots up the prices and they make profit by selling at higher prices, they say.
But the rising gas prices at pumps could force the two candidates to detail how they plan to deal with the situation. Currently, both are expressing concern which, analysts and pollsters say, is not likely to impress the voters.
The just-released economic data shows that about 49,000 jobs were lost in May, the fifth straight month in which employees got pink slips. That takes the number of job losses this year to 324,000 with the unemployment rate of more than 5.5 per cent. An estimated 8.5 million people nationwide are said to unemployed.
Taking note of deteriorating economy, Obama called the numbers "deeply troubling" and McCain said they were unacceptable and "stark reminder" of economic challenges facing American families.
Though both asserted that turning the economy around is on top of their agendas, neither offered any concrete proposal.
Bush, who refuses to acknowledge that the economy is in recession, said the numbers show the slow economic growth. "This is a time of turbulence in the housing market and slow growth for our overall economy."
Analysts say one reason for growing unemployment is that workers are unable to relocate as the houses they have bought do not sell because of slump and they are unable to buy another if they move.
The economic mess, they say, would need to be cleared by the next President as Bush has little time left to take any effective action which could show results. And over next months as the campaign heats up, the candidates would be under pressure to disclose their plans.