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NATIONAL ECONOMIC UPDATE National economic growth remains slow in the short run, challenged by the implications of severe spring weather, Japanese supply chain disruptions, and low consumer confidence and spending. Sluggish payroll growth has also contributed to negative consumer sentiment. GDP, however, is expected to continue slow growth through the second quarter, at around 2 percent. National Gross Domestic Product (GDP) • In the first quarter of 2011, Real GDP increased at an annual rate of 1.9 percent, according to a revised estimate by the Bureau of Economic Analysis. In the fourth quarter of 2010, real GDP increased 3.1 pe rce nt. • Slow GDP growth, attributed to factors including the struggling housing market and severe spring weather events, may lead to only gradual reductions in unemployment. Manufacturer's Shipments, Inventories and Orders • New orders for manufactured durable goods in May increased $4.0 billion or 2.1 percent to $196.3 billion, according to the U.S. Census Bureau. • Shipments of manufactured durable goods in May, up five of the last six months, increased $0.9 billion or 0.4 percent to $195.0 billion. This followed a 1.4 percent decrease in April. Personal Income & Consumer Spending • Real disposable income increased 0.1 percent in May, compared with a decrease of approximately 0.1 percent in April, according to the Bureau of Economic Analysis. • Personal income increased $36.2 billion, or 0.3 percent, in May. • Real personal consumption expenditures (PCE) declined 0.1 percent in May, the same as a revised - downward real PCE decline of 0.1 percent in April, according the Bureau of Economic Analysis. Housing • Sales of new single - family houses in May 2011 were at a seasonally adjusted annual rate of 319,000, with a median sales price of $222,600 according to estimates released jointly by the U.S. Census Bureau and Department of Housing and Urban Development. This is 13.5 percent above the May 2010 sales estimate of 281,000 single - family houses • Single- family housing starts, an indicator of current economic activity, were at a seasonally adjusted rate of 419,000 in May. • Single- family authorizations (building permits), an indicator of future economic activity, were at a seasonally adjusted rate of 405,000 in May; this is 2.5 percent above the revised April figure of 395,000. Consumer Confidence • National consumer confidence fell 3.2 points in June, down to 58.5, according to The Conference Board's Consumer Confidence Index. This is down from a three -year high of 70.4 in February 2011. If you would like to be added to the distribution list please contact: Jared Wiener, Director of Economic Analysis, PRSP (jwiener @nccommerce.com, 715 -4199) Report Author: Derek Ramirez — Economist Additional Report Contributors: Glenn McLaurin - Intern Previous Monthly Overviews are available on Commerce's website by clicking here or use the link below: http:// www. nccommerce .com /reseorch- publicotions /industry - economy /economic- reports Policy, Research & Strategic Planning; June Mqc it bptnber 1 1 -1 Page 577