Nonfarm Payrolls Worsen in June

U.S. employers cut 467,000 jobs last month, sending the unemployment rate up to 9.5%. This was the first time since January that nonfarm payrolls worsened.

The June drop was also far worse than economists had projected. Offsetting the bad news was a positive revision to May's number, with "just" 322,000 jobs being shed in the month.

Though the June unemployment rate was only fractionally higher than the month previous, it does imply that more than 1 out of every 11 Americans is unemployed. This is a conservative estimate, given that the unemployment rate has been previously criticized for under-counting the number of jobless workers.

This morning's data reinforces what I have said before: the economy is not out of the woods. Though economic conditions are clearly better than they were a few months ago, we remain in the midst of a recession.

Furthermore, once the economic data does finally start showing growth, it won't feel like a recovery to many Americans. Jobs will continue to be shed as CFOs focus more on cash flows than expansion. It's going to be a long, slow recovery.

Given the current backdrop, investors need to start positioning their portfolios for growth while not being overly aggressive. Look at companies that could benefit from the early stages of a recovery, such as International Business Machines (IBM), Research in Motion (RIMM), National Semiconductor (NSM) and Weatherford (WFT). At the same time, balance out the portfolio with more conservative names like Sara Lee (SLE) and Coca-Cola Femsa (KOF).

What you don't want to do is to be overly aggressive and buy companies that still have too much economic risk, such as Nordstrom (JWN), or stocks that have gotten ahead of themselves, like Palm (PALM).

Read the full analyst report on IBM

Read the full analyst report on RIMM

Read the full analyst report on NSM

Read the full analyst report on WFT

Read the full analyst report on SLE

Read the full analyst report on KOF

Read the full analyst report on JWN

Read the full analyst report on PALM