A bit of good economic news - seeking Alpha

By Carlos Guillen

The U.S. Department of Commerce, has delivered some good news Friday, announcing that the growth of real GDP in the first quarter of 2011 has been measured at 1.9% (final reading), which was slightly higher than the prior estimate of 1.8% provided a month ago. In addition, the result was above the estimate of the street of 1.8%. Disadvantage, we must stress that GDP in the fourth quarter 2010 registrants to 3.1%, most recent result of the Department have shown significant deceleration in the evolution of the GDP.

The small upward revision was the result of a slight increase in net exports and a most important contribution of the variation in stocks private; This was partially offset by a decrease in more large public expenditures of State and local and by a drop in non-residential fixed investment.

In General in the first quarter of 2011, GDP was positively affected by personal consumption expenditure (PCE), private inventory investment, exports and non-residential fixed investment. These positive contributions have been partially offset by negative contributions of expenditures of the Federal Government and State and local government spending and imports.

Some other good news is that orders for durable goods increased by 1.9% in may after the decline of 2.7% in April, coming higher than the estimate of the street of 1.5%. This introduces a remedy on the market as these durable goods have been a factor in the economic recovery, and there was concern that there is weakness as disruption of the supply chain, after the disaster of March to the Japan, had forced manufacturing.

We note that despite this bit of good news, much of the economic data has been pointing to a much slower than expected growth of the GDP for the remainder of the year and some caution is warranted that the Government continues the fight with the budget and debt ceiling, which is endangering debt capital investment costs. In addition, the rise continues in the prices of consumer goods is to get perspective back growth, causing levels of GDP expected to slow considerably. In fact, on Wednesday, the Federal Reserve lowered their year full GDP forecast in the range of 2.7%¨C2.9%, down from its forecast in April of 3.1%¨C3.3%. Although it is certainly not a double dip recession, the fact that so many economists have been cutting than estimates of GDP full year does raise important warning.