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NATIONAL ECONOMIC UPDATE Recent economic data continue to suggest moderate economic growth in the near term. The positive outlook has improved projections for the gross domestic product. The housing market is bottoming out as nondistressed house prices are stabilizing. Federal Reserve officials do not expect to raise short -term interest rates until late 2014, although they are divided on when to raise them and how fast. European troubles continue, although the European Central Bank's liquidity efforts appear to have headed off a broader banking crisis. National Gross Domestic Product (GDP) In the fourth quarter of 2011 real GDP, the output of goods and services produced by labor and property located in the United States, increased at an annual rate of 3.0 percent, according to the "third" estimate released by the Bureau of Economic Analysis. The increase in real GDP in the fourth quarter reflected positive contributions from private inventory investment, personal consumption expenditures (PCE), exports, residential fixed investment, and nonresidential fixed investment that were partly offset by negative contributions from federal government spending and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased. Manufacturer's Shipments, Inventories and Orders New orders for manufactured durable goods in January, down following three consecutive monthly decreases, decreased $8.0 billion or 3.7 percent to $206.9 billion. This followed a 3.3 percent December increase. Shipments of manufactured durable goods in January, up two consecutive months, increased $0.8 billion or 0.4 percent to $208.0 billion. This followed a 2.0 percent December increase. Personal Income & Consumer Spending Real disposable income decreased 0.1 percent in January, in contrast to an increase of 0.3 percent in December, according to the Bureau of Economic Analysis. Personal income increased $37.4 billion, or 0.3 percent, and disposable personal income (DPI) increased $14.1 billion, or 0.1 percent, in January. Personal consumption expenditures (PCE) increased $23.2 billion, or 0.2 percent, in January. Housing • Single- family housing starts in January were at a rate of 507,000. The January rate for units in buildings with five units or more was 181,000. • Single- family authorizations in January were at a rate of 450,000. Authorizations of units in buildings with five units or more were at a rate of 212,000 in January. Consumer Price Index The Consumer Price Index for All Urban Consumers (CPI -U), a cost of living measure for urban residents, was unchanged in December on a seasonally adjusted basis, the Bureau of Labor Statistics reported. Over the last year, the all items index increased 3.0 percent before seasonal adjustment. If you would like to be added to the distribution list please contact: Derek Ramirez, Economist, PRSP ( dramirez (@nccommerce.com, 919 - 715 -2358) Report Author: Derek Ramirez — Economist Contributing Author — Luther McNeal Previous Monthly Overviews are available on Commerce's website by clicking here or at the link below: http:// www. nccommerce. com/ en/ AboutDOC/ Publ icotionsReports/ EconomicDevel opmentReports /Month/y0verview.htm Policy, Research & Strategic Planning; February 2012 Report 1 -4 Page 262