By John Byczkowski
The Cincinnati Enquirer

With uncertainty over war and weakening consumer confidence looming like vultures, three events in the next three days could bring some focus to the nation's economic picture.

President Bush's State of the Union address tonight, a Federal Reserve Board meeting and a potentially dismal report on the state of the economy could bring tension or relief to concerned consumers, investors and business people.

"It's a very important week," said Lynn Reaser, chief economist for Banc of America Capital Management in St. Louis.

Depending on what happens in the next three days, an already cautious nation could become even more cautious. That would be bad news for the economy.

Here's what is scheduled:

At 9 tonight, Mr. Bush speaks to a joint session of Congress, and Iraq and the economy are expected to dominate that speech.

The two subjects are becoming one and the same. James Coons, chief economist at Huntington Bank in Columbus, said the war "is maybe the No. 1 factor" affecting the economy, partly because of its potential effect on oil prices.

The run-up in oil prices since November has had the same effect as a $50 billion tax increase, he said. If war pushed oil prices beyond $40 a barrel for any length of time, that could tip the nation back into recession.

The president is also expected to discuss his economic stimulus package, which depends heavily on cutting taxes on stock dividends.

"To somehow have that as the bulk of an economic stimulus plan, that's not going to cut it for most Americans," economist Chris Waller of the University of Kentucky said. The president might use the speech to shift emphasis of his stimulus plan, he said.

Beyond what the president says, "it will be important to see how the president delivers the speech and how the reception is on Wall Street and Main Street," Ms. Reaser said.

Wednesday afternoon, the Federal Reserve's Federal Open Market Committee concludes a two-day meeting and will announce any changes in interest rates or economic stance. While no moves on interest rates are expected, the Fed could shift its stance on the direction of the economy - an action that could affect financial markets.

That stance today is "neutral," and the Fed might shift to one that reflects concern for a weakening economy.

"The Federal Reserve is looking at all this uncertainty," Ms. Reaser said. "They are probably assuming, as we are, the Iraqi uncertainty represents a major roadblock" to economic growth.

Thursday morning, the Commerce Department releases its first estimate of economic growth for the final three months of 2002.

Most economists expect that report to show that gross domestic product grew slowly, but there's a chance the number could come in negative, meaning that the economy shrank in the fourth quarter.

"Business might become even more cautious," Mr. Coons said. "There's been a lot of hesitancy to spend or hire, and this would just delay that recovery."

A poor report on GDP growth might spur the Fed to cut interest rates at its next meeting, March 18.

E-mail johnb@enquirer.com