Economic Update – March 28, 2011

In its third and final report for the fourth quarter of 2010, the Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at an annual rate of 3.1%, rather than the 2.8% increase previously reported.

Existing home sales fell 9.6% in February to a seasonally adjusted annual rate of 4.88 million units from 5.36 million units in January. The inventory of unsold homes on the market increased 3.5% to 3.488 million, an 8.6-month supply at the current sales pace, up from a 7.5-month supply in January.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending March 18 rose 2.7%. Refinancing applications increased 2.7%. Purchase volume rose 2.7%.

New home sales fell 16.9% in February to a seasonally adjusted annual rate of 250,000 units from a rate of 284,000 units in January. Economists had expected a pace of 290,000 units in February.

Orders for durable goods — items expected to last three or more years — fell 0.9% in February after a revised 3.6% increase in January. Excluding volatile transportation-related goods, orders posted a monthly decrease of 0.6%.

Retail sales fell 0.1% for the week ending March 19, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 3%.

Initial claims for unemployment benefits fell by 5,000 to 382,000 for the week ending March 19. Continuing claims for the week ending March 12 fell by 2,000 to 3.72 million.

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