Plus: GDP Growth Scaled Down Again, Durable Goods Orders Fall and New Jobless Claims Drop.

U.S. GDP Growth Revised Down Again
The United States economy grew at a rate of 2.7 percent in the first quarter of 2010, down from the original estimate of 3.2 percent in April and a previously revised 3 percent projected earlier this month, according to the latest revised figures from the U.S. Department of Commerce, released Friday. In the fourth quarter of 2009, gross domestic product (GDP) rose 5.6 percent.

The latest GDP figures were unexpectedly low, as economists polled earlier by MarketWatch forecast no further revisions to this key economic statistic.

“Economists anticipate even slower growth ahead as companies bring their stockpiles more in line with sales,” the Associated Press reports. “Factory output has climbed this year. But it was driven more by businesses replenishing their warehouses after the recession and less by consumer demand.”

The negative trend in GDP growth was largely due to a slowdown in consumer spending, which fell to 3 percent from an earlier estimate of 3.5 percent, and in exports, which fell to 11.3 percent growth from 22.8 percent in Q4 2009.

Despite losing some momentum in the spending rate, “the weaker figure was still the highest personal expenditure level since the first quarter of 2007, and accounted for more than three quarters of GDP growth for the period from January to March,” Agence France-Presse explains.

Durable Goods Orders Fall in May
New orders for durable goods fell slightly in May, the first decline in six months, according to the U.S. Department of Commerce on Thursday.

Total orders for manufactured durable goods fell 1.1 percent in May from the previous month, mostly due to a drop in aircraft orders, which are prone to wide swings. Without the volatile transportation sector, orders climbed 0.9 percent in May, driven by a 5.6 percent uptick in orders for machinery and computer equipment.

“More importantly, new orders for nondefense capital goods excluding aircraft, a proxy for business equipment spending, were up by 2.1 percent, nearly rebounding from a 2.7 percent decline the month before and up by more than 15 percent from year-ago levels,” Cliff Waldman, an economist for the Manufacturers Alliance/MAPI, said in an analysis of the report. “The industry data were mixed, although it is encouraging to see spending on key supply chain industries such as machinery and primary metals holding up.”

Meanwhile, shipments of manufactured durable goods, down following two consecutive monthly increases, decreased 0.4 percent in May. This followed a 1.8 percent April increase.

CEOs Expect Sales and Hiring Improvements
Senior executives from many of the leading companies in the U.S. expect to see increased sales and greater hiring through the second half of 2010, strengthening the outlook for the economic rebound.

In the second-quarter CEO survey from the Business Roundtable, 79 percent of respondents said they expect to see increased sales over the next six months, compared to 73 percent who said the same in the first quarter of 2010, while only 4 percent anticipate a decrease in sales, down from 5 percent last quarter.

The promising sales outlook is likely to spur hiring, with 39 percent of company leaders planning to increase hiring in the next six months, the highest level since mid-2007, versus 29 percent who said the same in the first quarter. Seventeen percent expect to decrease payrolls, down from 21 percent last quarter, while 43 percent expect to see no change in employment levels.

“Our member CEOs plan to continue hiring and expect improved sales,” Ivan G. Seidenberg, chairman of Business Roundtable and chairman and CEO of Verizon Communications, said in an announcement of the findings. “That said, our CEOs are demonstrating some caution in the area of capital expenditures, with fewer planning to increase spending and more keeping it level.”

According to the report, 43 percent of CEOs plan to increase capital spending in the second half of the year, down from 47 percent during the first quarter, while 50 percent expect to see no change in spending. In both the second-quarter and first-quarter surveys, 7 percent anticipated decreases in expenditures.

Jobless Claims Drop Significantly
In the week ending June 19, first-time applications for state unemployment benefits fell by 19,000 to a seasonally adjusted 457,000, the lowest in six weeks, according to the U.S. Department of Labor on Thursday.

The report suggests that the economy is creating jobs, but too few to bring the unemployment rate down meaningfully, confirming that U.S. labor markets remain weak.

“Despite the drop of 19,000, claims are at about the same level they were at the beginning of the year,” the Associated Press reports. “First-time requests for unemployment insurance have been stuck at about 450,000 since the beginning of this year.”

The four-week average, considered a better gauge of labor-market conditions than the volatile weekly number, dipped by 1,500 to 462,750, the first drop in six weeks.

Meanwhile, the total number of people collecting unemployment benefits of any kind rose by 155,000 to 9.66 million in the week ending June 5, MarketWatch reports. The number of people collecting federal benefits rose by 47,000 to 5.36 million (not seasonally adjusted).

“The number of continuing claims remains near 4.5 million,” the Washington Post’s Economy Watch blog notes. “The official U.S. unemployment rate for May is 9.7 percent.”