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WASHINGTON: The paycheck struggles of Americans were at the centre of the presidential campaign, as Democratic candidate Barack Obama and Republican rival John McCain pushed their economic plans amid fresh reports of surging inflation and sagging wages. Their head-to-head battle began in earnest this week, following Hillary Rodham Clinton's departure from the race, and has focused squarely on fiscal issues - trumping the unpopular Iraq war as the pressing issue on voters' minds and putting McCain at a d istinct disadvantage.

The public splits between McCain and Obama as to who could handle Iraq best, but Obama is viewed as the one best to handle the economy. McCain is seeking to frame an economic policy that defends extending President George W Bush's tax cuts but embraces quick measures that the president opposes. Obama, benefiting from public disapproval of Bush's economic policies, has continued to link McCain to Bush.

The Labour Department reported on Friday that consumer prices rose by 0.6 per cent last month - the biggest one-month increase in inflation since last November - pushed up by surging gasoline costs. After adjusting for inflation, weekly earnings for non- supervisory workers were down 1.2 per cent in May, compared with a year ago, the department said in a separate report.

With the unemployment rate in May jumping to 5.5 per cent, McCain said on Friday he would support extending jobless assistance and said he was willing to discuss other short-term measures to boost the economy. "I think we should explore a number of optio ns,'' he told reporters following a town hall meeting in Pemberton, New Jersey. McCain argued for continuing Bush's tax cuts, most of which are set to expire in 2010. Failure to extend them, he said, would result in tax increases. - PTI

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