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Obama finds hope amid 'sobering news'

WASHINGTON, July 2 (UPI) -- U.S. President Barack Obama Thursday called the loss of 467,000 U.S. jobs last month "sobering news," but predicted the economy would continue to rebound.

Obama noted the number of jobs lost has been declining since the previous quarter. But, he added, "Obviously, this is little comfort to Americans who've lost their jobs."

Speaking in the White House Rose Garden, he urged patience sounding a familiar message.

"As I've said from the moment that I walked into the door of this White House, it took years to get into this mess, and it will take more than a few months to turn it around," he said.

Obama's comments came after he met with executives from energy companies, which he said would play a big role in creating jobs.

"As our economy adapts to the challenges of a new century, new ways of producing and saving and distributing energy offer a unique opportunity to create millions of jobs for the American people," he said.

Obama called energy a pillar of a "new foundation for lasting growth … essential both to our recovery and our long-term prosperity."

The president praised House lawmakers for passing energy legislation last week and urged senators to do the same.

Obama said the legislation would not only create millions of jobs, but also reduce U.S. dependence on foreign oil and lessen the consequences of climate change.

Opponents have said the higher taxes to pay for the energy plan and additional restrictions on industry would drive U.S. companies overseas.

California set to create first IOUs

SACRAMENTO, July 2 (UPI) -- The California state controller's office is set to print 28,742 IOUs worth $53.3 million to deal with the state's budgetary problems, officials say.

The Los Angeles Times said Thursday's printing plans mark the first time in 17 years officials at the state controller's office will embrace the use of IOUs as a stopgap measure.

The bulk of the printed IOUs will eventually find their way into the hands of California residents awaiting income tax refunds.

State financial officials have yet to determine what interest rate will be tied to the IOUs when they are used at banks and other financial institutions.

Certain banks have already announced they will accept the IOUs from state residents while others have not made a decision.

The Times said the initial production of the IOUs comes a day after California Gov. Arnold Schwarzenegger officially declared a fiscal emergency.

The governor, who issued school and public university budget cuts Wednesday, said his finance team estimates the state's budget deficit at $26.3 billion.

Many say U.S. economy still in trouble

ATLANTA, July 2 (UPI) -- Forty percent of respondents to a recent survey indicated the U.S. economy is still headed in the wrong direction, a CNN/Opinion Research Corp. poll said.

"Although polls in recent months have shown some signs of growing optimism, that appears to have stalled," CNN polling director Keating Holland said.

"In January, 50 percent said the economy was in very poor shape; that figure dropped to 37 percent in April, but now it has risen slightly, to 41 percent," Holland said.

"The prevailing view? We're in a stall," said CNN senior political analyst Bill Schneider.

Twenty percent of the respondents indicated the economy was in good shape, a jump from 11 percent in March, CNN reported.

The survey of 1,026 U.S. adults was conducted June 26-28 and carries a margin of error of plus or minus 3 percentage points.

Biden arrives in Iraq for meetings

WASHINGTON, July 2 (UPI) -- U.S. Vice President Joe Biden arrived in Iraq Thursday, for meetings with Iraqi leaders, including Prime Minister Nouri al-Maliki and President Jalal Talabani.

Biden plans to work with the Iraqi leaders to try to bring about long-term stability in the country, the White House said Thursday, and also visit U.S. troops.

Iraq celebrated National Sovereignty Day Tuesday as U.S. forces withdrew from cities and villages to military bases.

But the jubilant mood masked concerns about the ability of Iraqi security forces to take control amid lingering political disputes.

U.S. combat forces were obligated under the terms of a bilateral security agreement with Baghdad to pull out of city centers by midnight Tuesday and are set for a complete withdrawal by the end of 2011.

Blackwater facing new attack allegations

ALEXANDRIA, Va., July 2 (UPI) -- Contractors employed by the Blackwater private military company, now called Xe, were responsible for six unprovoked attacks in Iraq, a lawsuit alleges.

Plaintiffs in the lawsuit filed in U.S. District Court in Alexandria, Va., added six additional instances in which Blackwater contractors allegedly attacked Iraqi civilians without being provoked, The (Norfolk) Virginian-Pilot said Thursday.

The alleged attacks by contractors employed by Blackwater, which was contracted by the State Department to support U.S. personnel in Iraq, resulted in the deaths of three people, including a 9-year-old boy, the plaintiffs allege.

A racketeering count was also added to the lawsuit against the security company and its founder Erik Prince this week. The count includes alleged instances in which Prince's companies took part in illegal activities like homicides, tax evasion, weapons smuggling, kidnapping and child prostitution.

Susan Burke, attorney for the lawsuit's plaintiffs, said her clients want to prove the military company and its affiliated groups have an alleged history of illicit activity.

"What we're very, very worried about is this company hurting other people going forward around the globe," she told the Virginian-Pilot. "They're moving into Africa, they're moving into other places, and we believe they need judicial supervision."

Lawyer: Probe, trial took toll on Jackson

LOS ANGELES, July 2 (UPI) -- A two-year investigation and trial on child molestation charges may have contributed to U.S. entertainer Michael Jackson's death, his defense attorney said.

Attorney Tom Mesereau told "Inside Edition" he thought the stress of the investigation and 2005 trial "took a terrible toll" on the 50-year-old pop singer, who died June 25.

"He lost weight, his cheeks became sunken in. His eyes became heavy. He was terrified," Mesereau said on the syndicated show to be broadcast Friday. "I always saw him as lucid, articulate and coherent. Never did I think he was under medication or a dangerous drug."

"I think the poor soul may have just not fully recovered from leaving Neverland," his Santa Barbara County, Calif., estate, the attorney said.