Freedom Lawyers of America

August 1, 2003

Unemployment improving?  Yeah, right!  Here's the real story ...

Wall Street wants you to focus on today's unemployment rate,
which fell from 6.4% in June to 6.2% in July.  They say this is
proof positive the economy is healthy.

But the fact is, the Labor Department is undercounting people
who don't have jobs.

Fact:  The civilian labor force fell by 556,000 workers from
June!  In other words, the labor market is contracting.  So,
6.2% unemployed on a declining labor market could actually
mean there are more unemployed souls now than before!

Fact:  The number of "discouraged" workers -- those dropping
out from even looking for a job -- jumped to 470,000 in July.
That's up from 405,000 a year earlier ... and it's certainly NOT
a good sign.

Fact:  The number of jobs in the American economy has
declined for six months in a row!  And making matters worse,
the number of jobs lost in June jumped to 72,000 from the
previously reported 30,000.  That's more than double!
Obviously, the government is having trouble keeping up with
the hemorrhaging of jobs that's going on right now.  Moreover,
it's likely that July's job losses will be revised upward as well.

Fact:  Manufacturing jobs are just melting away, with a
whopping 71,000 disappearing in July alone.  America's
manufacturing sector is being hollowed out as production --
and jobs -- move overseas.

Fact:  The last time the economy added any significant jobs
was back in January -- and that gain has been swamped by
wave after wave of job elimination ever since.

Fact:  Unemployment is going to get worse, not better.  Job
losses just announced that aren't even in the unemployment
rate yet include ...

* Pillowtex Corporation is closing its doors, throwing
6,450 workers out of work.

* Verizon -- America's largest phone company -- is chopping
up to ANOTHER 5,000 jobs this year.  This comes on top of
the 15,000 pink slips that Verizon has handed out in the last
year.

* May Department Stores says it will close 32 Lord & Taylor
stores in 15 states, giving 3,700 workers the ax.  This is in
addition to the 1,500 workers May cut last month.

* Cigna Corp is giving 3,200 employees the boot.  The health
insurer is making the job cuts by the end of the year as part of
a restructuring.

And that's just a few of the companies that are laying off
workers right now, and are expecting to lay off more in the
weeks ahead.  None of this is good news for the economy --
or the markets!

August is a bear month for stocks!

Looking ahead, the market is now sailing into the teeth of
August storms.  The Stock Trader's Almanac shows that
August is the third worst month for the Nasdaq over the last
15 years AND the absolute worst month for both the Dow and
the S&P 500.  August is one of the worst months for the
market, period!

Investors are already battening down the hatches.  TrimTabs
reports that US equity funds saw inflows of $1.2 billion in the
week ending July 30.  That's less than half the $3.2 billion
that flowed into US equity funds in the previous week.

Heck, with a historically stormy August dead ahead, no one
can blame investors for booking profits and jumping ship.  And
with no real fundamental support for today's sky-high stock
prices, it won't take much for that retreat to turn into a rout.

We're watching the markets closely, and we'll continue to play
both sides -- both the temporary rallies and the big sell-off we
believe is coming.  So, stay alert for more updates and recos!