On the back of last month’s terrible jobs report — a measly 18,000 jobs added — comes more bad news for the U.S. economy. This time it’s from overseas: Italy and China, to be exact. Greece is in a state of total crisis, Portugal and Spain are nearing major debt problems of their own, and you can now add Italy to that list. Tomorrow, European finance ministers will meet in Brussels to discuss Italy’s heavy debt load and the increasing risk premium investors are demanding to lend the country money. In the short run, such instability in Europe does send more investors running to U.S. Treasuries, meaning cheaper borrowing for the United States. But the increased skittishness in the bond markets will be a much more immediate problem come early August if Congress has still not raised the debt ceiling — at which point we risk defaulting on the nation’s debt obligations. More likely to affect American pockets directly is the 3 percent dip in Chinese imports last month, considering the more than $100 billion worth of goods the United States sends China every year. Slowing the breakneck speed of China’s economy is an important step in avoiding collapse down the line, but that also means less money flowing our way right now. So, anyone have some good news to report?
Italy Becoming a Bigger Priority for Euro Zone [NYT]
Chinese Imports Slow but Exports Rise [NYT]