Gross Domestic Product (GDP)
The Bureau of Economic Analysis (BEA) released the first estimate of first quarter 2011 Gross Domestic Product (GDP) last week. 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 2.7% 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.

Consumer Confidence
The Conference Board index of consumer confidence rose in April to 65.4 from 63.8 (revised from 63.4) in March. The expectations component rose to 82.6 from 81.3 (previously 81.1) and the present conditions component rose to 39.6 from 37.5. While still well below pre-recession levels, April’s confidence level is at the higher end of the recent range. April’s gain was not enough to offset a steep decline in March, and rising oil prices could hamper confidence in the coming months. 

Durable Goods (Advance)
New orders for durable goods rose 2.5% in March, following an upward revision to February’s data to 0.7%. Core orders rose 3.7%, after increasing at an upwardly revised 0.5% in February. Shipments increased slightly by 1.8% in February and inventories rose by 1.3%.Unfilled orders increased 0.8%, building on last month’s 1.3% increase. This data is in line with recent production and survey data on manufacturing. 

New Home Sales
New home sales increased by 11.1% in March to a seasonally adjusted annual rate of 300,000 from 270,000 in February. Over the year sales are down 21.9%. The inventory of unsold homes fell in March to 183,000 from 185,000 in February. At the current sales rate the months’ supply is 7.3, down from 8.2 in February. Median home prices rose 2.9% to $213,800 in March. Over the year prices are down 4.9%. This report is further evidence that we are unlikely to see much improvement in the housing market this year.