August 7, 2004

Gun battles rage for second day between militia force loyal to radical Shiite cleric Moktadr al-Sadr, and US and Iraqi forces in Najaf, raising fears of extended battle that could undermine Iraq's new interim government; incomplete figures are given for US casualties, but commanders say 300 rebels were killed; it is heaviest Iraqi casualty figures in such short period that US has reported since Iraq fell; photos (M)

Analysis: Republicans had hoped indications that economy was turning corner would have allowed them to neutralize, or even turn to their advantage, issue that John Kerry had once considered central to his White House bid; but paltry new numbers on job growth, coming just three weeks before Republican convention, leave little doubt that economy could still be potent issue for Democrats; Pres Bush, rather than address his vulnerability head-on, delivered upbeat assessment of economy, saying it was getting stronger and lauding American entrepreneurial spirit (M)

Two surveys of jobs by Bureau of Labor Statistics yield different data; establishment survey, which questions 160,000 employers, paints bleak picture; other, household survey, qhich questions 60,000 people about whether thy or other family members are working, paints better picture; economists normally pay more attention to establishment survey because household survey is always more volatile, and month-to-month changes can be deceptive for that reason; household survey shows employment has risen by 1.9 million jobs, or 1.4 percent, since Pres Bush took office, while establishment survey shows employment is down 1.1 million jobs, or 0.8 percent; graph; chart; photo (M)

Some of trendy new bars in lower Manhattan eschew signs, which may enhance air of exclusivity but also irks customers; photos (M)

St Louis Cardinals defeat New York Mets, 6-4; photo (M)