Gross Domestic Product (GDP)
The Bureau of Economic Analysis (BEA) released the first revision of first quarter 2011 Gross Domestic Product (GDP) last week. Real GDP growth was unchanged in the latest report. Real GDP increased at an annual rate of 1.8%, following growth of 3.1% growth in the fourth quarter of 2010. The slower pace of economic growth was the result of declines in net exports, government spending, structural and residential investment, and a slower increase in consumer spending. Consumption increased at a 2.2% annual rate, down from 4% in the fourth quarter of 2010. Despite the relative decline, this was still a relatively strong showing in the face of higher gas prices and bad weather. We expect the pace of growth to pick up a bit over the remainder of the year.

Durable Goods (Advance)
New orders for durable goods fell 3.6% in April, expectations had remain modest, however this is a larger than expected decline. Core capital good orders excluding aircrafts fell 2.6%, the third decline in four months. Shipments decreased slightly by 1.0% in April while inventories rose by 0.9%. Unfilled orders increased 0.2%, building on last month’s 0.7% increase. While a bit weaker than expected we expect the pace of business investment to remain relatively strong in coming months.

New Home Sales
New home sales increased by 7.3% in April to a seasonally adjusted annual rate of 323,000 from 301,000 in March. Over the year sales are down still 23%%. The inventory of unsold homes fell in April to 175,000 from 183,000 in March. At the current sales rate the months’ supply is 6.5, down from 7.2 in March. Median home prices rose 4.6% from a year ago. Over the year prices are a volatile measure, especially since few sales are occurring. Despite some growth, this report is further evidence that we are unlikely to see much improvement in the housing market this year.