Best Financial Markets Analysis Article Real GDP of the U.S. economy increased at an annual rate of 1.3% in the second quarter, slightly higher than the earlier estimate of a 1.0% gain. The main reasons for the larger gain in GDP were stronger growth of structures, consumer service sector outlays, exports, and residential investment expenditures.

The final estimate also shows small upward revisions of inflation data. Going forward, real GDP is expected to grow around only 2.0% in the second half of 2011, which would put the increase in real GDP in 2011 significantly below the 3.0% increase recorded in 2010.

In other economic news, initial jobless claims fell 37,000 to 391,000 during the week ended September 24. Seasonal factor issues related to calendar timing is partly responsible for the drop in initial jobless claims according to a Bloomberg report citing the Department of Labor. The four-week moving average continues to hold at a high level (see Chart 4) and continuing claims, which lag initial jobless claims by one week, fell 20,000 to 3.729 million. It is interesting to note that continuing claims have held nearly steady for several months (see Chart 5). The evidence continues to point to significantly weak trends in hiring.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

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