Editor's Note: The following is reprinted with the permission of the Council on Foreign Relations.
Though the United States economy continues to struggle, employers added 117,000 jobs (NYT) in July, the Labor Department reported on Friday. The figure was far more than the 18,000 net new jobs reported in June and the most new jobs added in a month since April. Unemployment dropped slightly to 9.1 percent. Fears that the global economy could be moving again toward recession sent global markets plunging Thursday and Friday (WashPost), with economic and financial problems around the world fueling a cycle that risks spiraling beyond the governments' control. It was the second drop in two days, after stocks plummeted Wednesday following President Barack Obama signing of the $2.4 trillion debt limit increase.
A troubling dynamic is taking hold where spreading debt in Europe creates new risks for the United States, and the chance of another U.S. recession worsens the European fiscal crisis. These hurdles come as China and other rising economic powers are trying to slow their economies to combat inflation.
Despite global market fears of a U.S. credit downgrade, U.S. treasuries will remain the safest bet for international investors, says global economics expert Kent Hughes in this CFR interview.
The agreement on raising the debt ceiling falls far short of the deep reforms needed to improve U.S. spending patterns and the country's global standing, writes CFR's Sebastian Mallaby.
Middle East: Qaddafi's Son Killed in NATO Strike
Libyan leader Muammar al-Qaddafi's son Khamis (CSMonitor), the leader of one of the country's most elite fighting units, was reportedly killed in a NATO airstrike in Zlitan overnight.
Syria: Security forces shelled the besieged city of Hama (NYT) overnight and prevented food and medical supplies from entering residential areas, raising fears that the death toll could escalate dramatically, activists said on Friday. This CFR Analysis Brief says expert opinion remains mixed on whether the Syrian government can be weakened.
Southeast Asia: Thailand Elects Female PM
Yingluck Shinawatra, the country's first female prime minister (BangkokPost), has shaken up Thai politics with a revival of the populist legacy of her exiled brother and former premier Thaksin Shinawatra.
In this blog post, CFR's Joshua Kurlantzick says the recent uprisings in Malaysia and Thailand, on the heels of the "Arab Spring," have emboldened democracy advocates around the world.
PACIFIC RIM: Japan's Yen Concerns
Japanese officials reiterated their determination to push down the value of the yen a day after what appeared to be its largest ever single-day currency intervention (WSJ). The yen is viewed as a safe haven for investors amid new signs of trouble in the U.S. and European economies.
AFRICA: Africa Horn Migrants Face Migration
Large numbers of Ethiopians and Somalis fleeing war, drought, and poverty are being refused entry tocountries in the south (Guardian), particularly South Africa, where a majority of them are headed.
AMERICAS: Unasur Finance Ministers to Address U.S. Debt
Finance Ministers from the Union of South American Nations will meet today in Lima to agree on a coordinated response to the economic harm from several years of U. S. dollar decline (MercoPress).
Brazil: Brazil's defense minister Nelson Jobim resigned after making disparaging remarks about other officials (BBC). President Dilma Rousseff replaced him with former foreign minister Celso Amorim.
EUROPE: EU Official Says Markets Reacted Unexpectedly
EU Economic Affairs Commissioner Olli Rehn said Friday that financial markets have not reacted as expected (Reuters) to their deal last month to stabilize the eurozone and said bond-market upheaval is "not justified by economic and budgetary fundamentals."
EU states need to prepare for "widespread restructuring of sovereign and bank debt," says a new report from the Peterson Institute for International Economics, which finds the eurozone's efforts at stabilizing its finances to be failing.