Gross Domestic Product (GDP)
The Bureau of Economic Analysis (BEA) revised its second estimate of fourth quarter 2010 Gross Domestic Product (GDP) upwards by 0.3 percentage points to an annual rate of 3.1%. This follows growth of 2.6% in the third quarter and 1.7% in the second. Upward revisions to inventory investment and nonresidential fixed investment were the main contributors to the upward revision and helped offset downward revisions to exports, consumption, and government spending. Included in this report was the first estimate for corporate profits, which increased 9.6% at an annual rate. The upward revision to previous estimates was a positive sign, but we don’t expect significantly faster growth until the second half of this year.

Existing Home Sales
Existing home sales fell 9.6% in February to 4.88 million annualized units from 5.4 million in January. Over the year sales are down 2.8%. The slower pace of home sales brought the inventory of unsold homes up to 3.49 million from 3.37 million. At the current sales rate the months’ supply is 8.6, up from 7.5 in January. Accompanying the decline in sales was a decrease in prices. Median home prices slipped 1.1% in February and are down 5.2% over the past year. Sales in February highlight how far we are from a healthy housing market.

New Home Sales
New home sales declined by 16.9% in February, to a seasonally adjusted annual rate of 250,000, from 301,000 in January. Over the year sales are down 28%. The inventory of unsold homes was unchanged in February at 186,000. At the current sales rate the months’ supply is 8.9, up from 7.4 in January. Median home prices decreased 13.9% to $202,100 in February. Over the year prices are down 8.9%. This report is further evidence that we are unlikely to see much improvement in the housing market this year.

Durable Goods
New orders for durable goods fell 0.9% in February, following a much stronger gain of 3.6% in January. January’s gain nearly offset three consecutive declines. Even with February’s decline, the level of orders remains above December’s. Machinery, primary metals, and transportation equipment orders led the decrease. Core orders, nondefense capital goods orders excluding aircraft fell, 1.3%. Shipments increased slightly by 0.3% in February. Inventories rose by 0.9 %, the fourteenth straight month of positive gains. Unfilled orders increased 0.4%, building on January’s increase of 0.7%. This data has been pointing to slower increases in business investment for 2011.