It looks like the only ones in denial are the government officials, or is it that if they told us how bad things really are, everyone would freak?

Pacific Investment Management Co.’s Bill Gross and David Rosenberg, chief economist at Gluskin Sheff & Associates Inc., said June’s employment report indicates sluggish job growth and a slowing economy.

Employers cut 125,000 jobs last month, reflecting a drop in federal census workers, after an increase of 433,000 in May, Labor Department figures showed. Companies in the U.S. hired 83,000 workers, below the median forecast in a Bloomberg News survey for a gain of 110,000. The unemployment rate dropped to 9.5 percent from 9.7 percent as the labor force shrank.

“That’s a statistical illusion because you had this precipitous fall-off for the second month in a row in the labor force and without that, the unemployment rate would have gone up to 10 percent,” Toronto-based Rosenberg said during a radio interview on Bloomberg Surveillance with Tom Keene. “You can go as high as 16.5 percent, if you count the unemployed and under- employed.”

The pace of hiring signals it will take years for the world’s largest economy to recover the more than 8 million jobs lost during the recession that began in December 2007. The turmoil in financial markets brought on by the European debt crisis raises the risk that employment will slow, depriving American households of the income needed to maintain spending.

“The economy is slowing, not just in the United States, but globally,” Gross, co-chief investment officer at Pimco, said in a separate interview with Keene. “It’s a ‘new normal’ type of phenomenon. I don’t think the Federal Reserve can raise interest rates in the face of unemployment near 10 percent.”

Read the entire article at:http://www.bloomberg.com/news/2010-07-02/gross-rosenberg-say-employment-growth-reported-last-month-is-an-illusion.html