Mixed messages on the economy

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Markets tumbled on Monday as embattled Facebook sparked a tech selloff — the most recent illustration of the mixed economic indicators prevalent in the news.

Many of the economic indicators like consumer confidence and unemployment remain at an unprecedented level. The Federal Reserve reported that manufacturing production rebounded in February, up 1.2 percent, and consumer confidence soared to its highest level since 2004.

At the same time, the U.S. Commerce Department reported retail spending declined 0.1 percent in February for the third straight month, according to Bloomberg Businessweek, surprising economists polled by Reuters, who had forecast retail sales rising 0.3 percent in February.

Default rates on subprime auto loans climbed even as companies continue to finance those loans, Bloomberg reported.

The Dow Jones Industrial Average ended down 335.60 points on Monday, or 1.35 percent, to 24610.91, while the S&P 500 lost 39.09 points, or 1.42 percent, to 2712.92. The Nasdaq fell 137.74 points, or 1.84 percent, to 7344.24.

Several stock market writers today, such as Mark Hulbert in USA Today, cautioned against thinking the bull market is invincible.

“The nine-year stretch of rising stock prices won’t last forever,” Hulbert wrote. “So, now’s a good time for investors to bear-proof their 401(k)s before the next financial storm.”

A CNBC headline on Monday said: “This index shows enthusiasm for the economy is getting out of hand,” while Goldman Sachs Group said stock market decline in February was a symptom of growing “financial fragility,” according to Bloomberg Markets.

U.S. auto sales fell 2 percent in February, the Associated Press reported.

Motor vehicle and parts sales fell 0.9 percent in February, decreasing for the fourth consecutive month and one of the larger drags in the latest economic report, according to the National Association of Manufacturers.

The Federal Reserve reported that manufacturing production rebounded in February, up 1.2 percent, after edging down 0.2 percent in January. That was the fastest monthly pace of growth since October, and overall, the data continue to show healthy growth for manufacturers, with strength last year carrying over into this year, the NAM reported.

“The Index of Consumer Sentiment from the University of Michigan and Thomson Reuters jumped to 102.0 in March, the highest level since January 2004,” NAM chief economist Chad Moutray wrote in his Monday report. “The press release notes that those individuals with higher incomes felt less upbeat in the most recent survey — likely from volatility in equity markets and the impact that has on personal finances — but that was not enough to drag down the headline index.”

The consumer price index has risen 2.3 percent over the past 12 months, the fastest year-over-year pace since March 2017, Moutray wrote, and producer prices for final demand goods and services have increased 2.9 percent year-over-year.

Housing permits also weakened, down from an annualized 1,377,000 units in January — also the best reading since August 2007 — to 1,298,000 units in February, Moutray wrote, adding: “Much like the starts figures, this was the fifth consecutive month with permitting above 1.2 million units, and the trend continues to be a mostly heartening one.”

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