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NATIONAL ECONOMIC UPDATE Recent economic data point to subpar growth in the near term. Growth in the second half of 2011 could pick up, but there's a risk of continued slow growth. Difficulties with raising the debt ceiling have made investors and consumers anxious, but the completed budget deal may help alleviate worries. National Gross Domestic Product (GDP) • In the second quarter of 2011, real GDP increased at an annual rate of 1.0 percent, according to the "second" estimate released by the Bureau of Economic Analysis. • The increase in real GDP in the second quarter primarily reflected positive contributions from exports; nonresidential fixed investment, personal consumption expenditures, and federal government spending that were partly offset by a negative contribution from state and local government spending and private inventory investment. Manufacturer's Shipments, Inventories and Orders • New orders for manufactured durable goods, up two of the last three months, increased $8.0 billion or 4.1 percent to $201.9 billion in July, according to the U.S. Census Bureau. Shipments of manufactured durable goods in July, up seven of the last eight months, increased $4.7 billion or 2.4 percent to $201.9 billion. This followed a 1.1 percent June increase. Personal Income & Consumer Spending • Real disposable income increased 0.1 percent in July, in contrast to an increase of 0.3 percent in June, according to the Bureau of Economic Analysis. • Personal income increased $42.4 billion, or 0.2 percent, in July. • Real personal consumption expenditures increased 0.5 percent in July, compared with a decrease of less than 0.1 percent in June. Housing • Sales of new single - family houses in July 2011 were at a seasonally adjusted annual rate of 298,000, with a median sales price of $222,000 according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. • Single- family housing starts, an indicator of current economic activity, were at a seasonally adjusted rate of 425,000 in July; this is 4.9 percent below the revised June figure of 447,000. • Single- family authorizations (building permits), an indicator of future economic activity, were at a seasonally adjusted rate of 404,000 in July, 0.5 percent above the revised June figure of 402,000. Consumer Confidence National consumer confidence plummeted in August by 14.7 points to 44.5, down from 59.2 in July, according to The Conference Board's Consumer Confidence Index. This is the lowest level since April 2009 when the Index was 40.8. 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 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; August Mgcir bptnber1 1 -1 Page 451