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<\/a>On the surface, today\u2019s jobs market<\/a> report looks good\u2026<\/p>\n195,000 jobs were created in the U.S. economy during the month of June, with the \u201cofficial\u201d unemployment rate for the month sitting at 7.6%, unchanged from May. (Source: Bureau of Labor Statistics, July 5, 2013.)<\/p>\n
But look a little closer and this jobs market report is a catastrophe\u2026<\/p>\n
Look at the underemployment rate, which includes people who have given up looking for work in the jobs market and those who are working part-time because they can\u2019t get full-time work\u2014based on this number, the picture looks drastically different. In June, the underemployment rate rose from 13.8% to 14.3%\u2014the highest level since February! That means that one out of every seven Americans who want to work can\u2019t get a job. (And the politicians keep telling me the economy is improving?)<\/p>\n
And if that wasn\u2019t bad enough\u2026<\/p>\n
Most of the jobs created in June were part-time jobs; the number of people working part-time in the U.S. jobs market rose by 322,000 to 8.2 million. These people aren\u2019t working part-time because they want to\u2014it\u2019s because they can\u2019t find full-time work.<\/p>\n
And there\u2019s still more\u2026<\/p>\n
Of the jobs created in June, 60% were in low-paying positions: 75,000 jobs were created in the leisure and hospitality sector, and 37,000 jobs were created in the retail sector! Low-paying jobs do not create economic growth.<\/p>\n
The numbers don\u2019t lie. The jobs market report today loudly screams, \u201cNot a lot has changed in the U.S. economy.\u201d Let\u2019s get real, politicians; the way the government creates the unemployment rate is misleading. Millions of Americans are resorting to food stamps for one reason\u2014they can\u2019t find a job and have run out of savings.<\/p>\n
I remain very skeptical about the so-called \u201ceconomic recovery.\u201d There is no growth in the U.S. economy. Today\u2019s jobs market report affirms my belief.<\/p>\n
A healthy jobs market can give the U.S. economy the economic growth we so desperately need. When Americans have jobs, they buy more goods, they spend on durable goods, first-time home buyers enter the housing market, and consumers generally spend more\u2014but none of this is happening. A worsening jobs market puts the brakes on consumer spending<\/a> and ultimately causes the U.S. economy to suffer, even contract. (Remember: consumer spending makes up almost 70% of U.S. gross domestic product.)<\/p>\n Dear reader, the question has become: \u201cHow can we not avoid a recession in late 2013 or in 2014?\u201d Get ready for it.<\/p>\n Michael\u2019s Personal Notes<\/a>:<\/b><\/p>\n I can\u2019t say this often enough: the eurozone<\/a> debt crisis is here to stay for a long time. The key stock indices might have given investors false hope, but we are still standing at square one of any economic recovery.<\/p>\n Greece, which was at the epicenter of the eurozone debt crisis, may be required to issue Treasury bills to stay solvent. The country has to convince the International Monetary Fund (IMF) and its eurozone peers that it has made the changes required by the bailout conditions it agreed to. If it fails to do so, Greece will not receive any aid from its eurozone partners for the next three months. (Source: MNI Deutche Borse Group, July 3, 2013.)<\/p>\n But Greece has actually failed to follow through on two conditions set by its creditors: cutting 12,500 jobs from the government sector and reducing a small but significant fiscal gap.<\/p>\n And Greece is hardly the only troublesome nation when it comes to the eurozone debt crisis. Look at Portugal\u2014problems are emerging in that eurozone nation as both its finance minister and its foreign minister recently resigned. There are fears that the Portuguese government might collapse and put the 78-billion-euro bailout it received in 2011 in jeopardy. (Source: Reuters, July 3, 2013.) Those fears have caused the key stock index in Portugal to plummet and bond yields to soar.<\/p>\n And it doesn\u2019t end here. The third-biggest economic hub in the eurozone, Italy, is facing troubles of its own. Antonio Guglielmi, an analyst at the second-biggest bank in the country, Mediobanca, in a confidential report to clients wrote, \u201cThe Italian macro situation has not improved over the last quarter, rather the contrary. Some 160 large corporates in Italy are now in special crisis administration.\u201d (Source: \u201cItaly could need EU rescue within six months, warns Mediobanca,\u201d Telegraph<\/i>, June 24, 2013.)<\/p>\n The report also indicated that the eurozone country will \u201cinevitably end up in an EU bailout request\u201d in the next six months unless it is able to lower its borrowing costs and recover from economic chaos. (Source: Ibid.)<\/p>\n Keep in mind that Italy is the country with the most debt in the region and third worldwide, after the U.S. and Japan. The debt crisis that the mainstream media claimed was over or under control could easily shake the global economy again.<\/p>\n All of this shouldn\u2019t come as a surprise to my readers. I have been warning about the debt crisis in the eurozone for some time now. The common currency region still has some major problems that need to be fixed before it can be said that it\u2019s in good economic shape.<\/p>\n What worries me even more is that the nations with stronger economies, such as France, have also fallen prey to the troubles in the eurozone. France is currently in a recession and the country\u2019s unemployment rate remains high. The longer the debt crisis continues in the eurozone, the deeper its impact will be on the stronger economies like that of France.<\/p>\n I can\u2019t stress this enough: the eurozone is critical to our own economy, because a significant number of American-based companies operate and gain revenues from the eurozone. Troubles in that region could hurt the profitability of North American companies, which could eventually cause the key stock indices here at home to slide lower.<\/p>\n