Economic Outlook: A big deal

Strong data from housing and manufacturing could not stop U.S. markets from a corrective stumble that rippled through Asian and European markets Wednesday.

Pending home sales bumped up for the sixth consecutive month, the National Association of Realtors said. The streak indicated a "clear" recovery, NAR Chief Economist Lawrence Yun said, pronouncing the upswing, "broad-based across many parts of the country."

Similarly, the Institute of Supply Management announced its headline index had punched into positive territory for the first time in 18 months. Eleven of the 18 watched production sectors made gains in August, including textile and paper producers and chemical companies. Computers and electronics made gains, as well.

Ominously, the employment index remained in contraction, but new orders grew in August, jumping to 64.9, well above the break-even point of 50.

President Barack Obama called the data, "a sign that we're on the path to economic recovery."

Then markets fell.

U.S. markets ticked down about 2 percent Tuesday. The Nikkei 225 average in Japan followed with a 2.37 percent loss. In Hong Kong, the Hang Seng index dropped 1.76 percent. The Singapore Straits Times drooped, down 1.02 percent, while the S&P/ASX in Australia fell 1.69 percent.

In midday trading in Europe markets also sagged. The pan-European DJStoxx 600 dropped 0.83 percent, while the FTSE 100 in Britain shed 0.23 percent. In Germany, the DAX 30 slipped 0.54 percent, while the CAC 40 in France fell 0.68.

The buzzword for the discordant slide was "correction," especially in the United States, where markets have enjoyed a six-month upswing.

"I think we got ahead of ourselves," Stanley Nabi, vice chairman of Silvercrest Asset Management told The Washington Post.

Bank stocks were a case in point, gaining 150 percent as a group from March lows. But the Standard & Poor's 500 has also steamed to a white heat since March, up 48 percent from March 9, when the index hit 677. On Tuesday, it slid below 1,000 to 998.04.

Everyone, of course, is looking for customers -- and those are the guys with jingle in their pockets and a purposeful stride. Where are they?

Eurostat said Tuesday more than 21 million men and women were unemployed in the 27-member European Union states, with more than 15 million unemployed in the 16 member states that use the euro.

In Japan, the world's second largest economy, unemployment is at a record 5.7 percent. U.S. manufacturing, despite recent gains, is still 2 million jobs short of pre-recession levels. Economists predict Friday's U.S. Labor Department report will show unemployment returned to 9.5 percent in August after a slight down tick in July.

Positive signs in manufacturing is "a big deal," Wells Fargo Chief Economist John Silvia told The New York Times. "It does suggest that manufacturing is recovering."

"What's the sustainability going forward?" he asked. "So much of that depends on the consumer."