The U.S. and the world economies are still in an extremely fragile state that could still break at any moment. Of course, hopefully not. But for now, I’m convinced we’re headed for the stagnation (not stagflation, which includes inflation) for the foreseeable future.

Unfortunately, this is not just a big problem in the United States alone, but also in Germany, Japan, and elsewhere. This situation is once again confirmed by various economic indicators, including in employment and manufacturing.

Today’s dismal U.S. employment numbers, which show continued contraction in June, with payroll jobs falling more than expected while the unemployment rate rose just marginally.

The June contraction in jobs was worse than the market forecast for a 350,000 decrease. May and April revisions were up a net 8,000. Payroll losses were widespread. Civilian unemployment rate rose to 9.5 percent, the highest in 26 years since August 1983.

Meanwhile, yesterday’s U.S. manufacturing conditions from the Institute of Supply Management (ISM) show us that 19 months after this recession began most of the economic indicators are still getting genuinely worse.

Very worrisome is the fact that inventories continued to contract to 30.8 percent at a faster rate, which is already a 27-year low. This still-continuous downward trend in U.S. inventories, now in their 38th consecutive down-month, completely and factually contradicts all that optimistic noise-making we have heard now for some time that was promising a rebuilding of inventories. Obviously, customers are still cutting back.

Don’t think of buying the dips yet, it’s way too early. That nasty thing that many call the “unpredictable” surprise still lurks. It shouldn’t be unpredictable for you and your portfolio.