It seems that every time a new economic indicator is released, whether it pertains to the housing market, job data, retail sales or consumer confidence, the market jumps to factor in the new information, only to slowly move back to its fundamental value over the next few days. After the initial adjustment, a new indicator is released and the process repeats itself once again. (The tools in Economic Indicators For The Do-It-Yourself Investor put the market (and any evaluations) in your hands.)

In Pictures: The Biggest Bank Failures

For example, a report stating that GDP exceeded expectations can cause a sudden surge in the market, which will be followed by a slow correctional period. If a subsequent finding indicating an increase in unemployment follows, equities drastically move the other way, once again deviating from the underlying fundamentals. A more appropriate way to analyze indicators is to conduct a comprehensive investigation of a number of economic figures, rather than focusing on a single variable.

March Results
For the purposes of this analysis, 10 major economic indicators are included to present an overview of the general trend and activity in March. Overall, we witnessed a mix of results making the headlines throughout the last month - some positive, some negative. Most indicators, however, showed marginal positive results when compared to February's announcements, and especially when compared to March, 2009. (Leading indicators help investors to predict and react to where the market is headed. Find out more, in Leading Economic Indicators Predict Market Trends.)

Housing
Housing data was fairly stable, although a slight negative trend was observed. Housing starts decreased by 1.61%; housing sales decreased by 0.59%, and housing prices remained basically flat. When compared to last year's figures, starts and sales increased by 11.27% and 7.04% respectively, but home prices actually saw a decrease of 1.84%.

Job Market
The job market is still bleak as the unemployment rate remains at a staggering 9.7%, which is actually 1.5% above where it was last year. Likewise, the number of people unemployed for an extended period of time (at least six months) increased by 106.92% within the past year. Nonetheless, half-year unemployment is steadily decreasing and initial jobless claims have decreased by 11.24% and 31.24% on a month-over-month and year-over-year basis, respectively.

Retail
Retail has made a drastic year-over-year comeback, while monthly data is only slightly positive. Total retail sales increased to $355.5 trillion, from $354.3 trillion in the month before. However, car sales experienced a significant monthly decrease of 2.28%. The decrease can probably be attributed to the recent plethora of automotive recalls rather than the consumers' unwillingness to spend. (The institutional sector offers an intellectual and financially rewarding alternative. Find out more, in Do You Belong In Retail?)

Outlook
Despite the gloomy data emerging from the housing and employment sector, businesses and consumers are confident in future prosperity. The business outlook, compiled by the Federal Reserve Bank of Philadelphia, increased to 18.9 this month, from 17.6 in the previous period, a massive upswing from last year's value of -35. Likewise, consumer confidence escalated from 26 in 2009, to 26.4 in February ,and 52.5 in March.

Economy
Overall, the monthly indicators released in March do not show a convincing picture of economic improvements. Despite that yearly values are undoubtedly superior to those of March, 2009, monthly progress, especially in terms of unemployment, still presents challenges to a full recovery. The indicators which strongly suggest economic growth do not pertain to hard sales or employment figures, but reflect the consumer and producer outlook, which are the most likely drivers of the 6% monthly increase of the S&P.

Because the housing market must still stabilize and unemployment must reduce, these issues need to be addressed within the upcoming months. After passing the health care reforms, earlier on this month, hopefully the American government will now be able to focus on some of these other pressing issues.

Summary of Results
Index This Month Last Month Last Year Monthly Change Annual change












Housing Starts * 612 622 550 -1.61% 11.27%
Existing Housing Sales* 5020 5050 4690 -0.59% 7.04%
Housing Prices* 1651 1649 1682 0.12% -1.84%
Employment Report 9.70% 9.70% 8.20% 0.00% 18.29%
Half Year Unemployment* 6133 6313 2964 -2.85% 106.92%
Initial Jobless Claims* 442 498 642 -11.24% -31.15%
Business Outlook 18.9 17.6 -35 1.91%***

Consumer Confidence 52.5 46.4 26 13.15% 101.92%
Retail Sales** 355.5 354.3 342.4 0.34% 3.83%
Car Sales ** 51.5 52.7 50.1 -2.28% 2.79%












S&P 500 Index 1169.45 1104.49 797.87 5.88% 46.57%
*Thousand
** Billion
***Adjusted for mean and standard deviation

Still feeling uninformed? Check out last week's business news highlights in Water Cooler Finance: Zombies File Taxes, Dead Bills Rise Again.

Related Articles
  1. Charts & Patterns

    4 Ways To Predict Market Performance

    One school of thought to predicting market performance says, “Don’t fight the tape,” meaning, don’t get in the way of market trends.
  2. Investing News

    Latest Labor Numbers: Good News for the Market?

    Some economic numbers are indicating that the labor market is outperforming the stock market. Should investors be bullish?
  3. Investing News

    Is the White House too Optimistic on the Economy?

    Are the White House's economic growth projections for 2016 and 2017 realistic or too optimistic?
  4. Economics

    Can the Market Predict a Recession?

    Is a bear market an indication that a recession is on the horizon?
  5. Economics

    The Truth about Productivity

    Why has labor market productivity slowed sharply around the world in recent years? One of the greatest economic mysteries out there.
  6. Products and Investments

    The One Thing Your Portfolio Must Always Have

    Portfolio diversification is essential in any situation, but especially so as the market finally returns to fundamentals.
  7. Investing News

    U.S. Recession Without a Yield Curve Warning?

    The inverted yield curve has correctly predicted past recessions in the U.S. economy. However, that prediction model may fail in the current scenario.
  8. Economics

    The Delicate Dance of Inflation and GDP

    Investors must understand inflation and gross domestic product, or GDP, well enough to make decisions without becoming buried in data.
  9. Investing News

    Market Outlook: No Bottom Until 2017?

    These investing pros are bearish on the market in 2016. Will there be a bottom in early 2017?
  10. Economics

    Negative Interest Rate Policy (NIRP)

    A negative interest rate policy is an unconventional monetary policy tool in which nominal target interest rates are set below zero.
RELATED FAQS
  1. What's the difference between microeconomics and macroeconomics?

    Microeconomics is generally the study of individuals and business decisions, macroeconomics looks at higher up country and ... Read Full Answer >>
  2. Is Russia a developed country?

    Though it once reigned alongside the United States as a world superpower, Russia is not classified as a developed country ... Read Full Answer >>
  3. Is North Korea a developed country?

    North Korea is one of the poorest and least developed countries in the world. It is far from a developed country. Because ... Read Full Answer >>
  4. Is Mexico a developed country?

    As of 2015, Mexico is not a developed country. However, it beats the majority of its peers in the developing world on most ... Read Full Answer >>
  5. Is China a developed country?

    Despite having the world's second-largest economy and third-largest military, China is still, as of 2015, not classified ... Read Full Answer >>
  6. Is Greece a developed country?

    Greece is a developed country by most meaningful metrics. However, its financial struggles have been well documented in the ... Read Full Answer >>
Hot Definitions
  1. Short Selling

    Short selling is the sale of a security that is not owned by the seller, or that the seller has borrowed. Short selling is ...
  2. Harry Potter Stock Index

    A collection of stocks from companies related to the "Harry Potter" series franchise. Created by StockPickr, this index seeks ...
  3. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  4. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  5. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  6. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
Trading Center