Saturday, 8 May 2004

Economy still going strong

The economic news flow continues to look good.

The US has been seeing some impressive numbers. First-quarter profit for S&P 500 companies increased 26.8 percent, based on results for 443 members that have reported. Economists surveyed this month by Bloomberg News projected that the US economy will grow 4.6 percent this year, the most since 1984. And just yesterday, the US Labor Department reported that companies in the US added 288,000 workers to payrolls in April, following a revised gain of 337,000 jobs in March (see U.S. April Payrolls Rise 288,000; Jobless Rate Falls).

Singapore has also been seeing good news. Results of surveys by the Singapore Institute of Purchasing & Materials Management and the Economic Development Board indicate that the manufacturing sector, especially electronics manufacturing, will remain strong in the coming months (see Good outlook for Singapore manufacturing and electronics). And on Thursday, SingTel announced record profits, share buybacks and increased dividends for shareholders (see SingTel reports good results, rewards shareholders).

The main concern now is whether rising inflation and interest rates will put an end to the boom. US PPI and CPI data for April, due to be announced on 13 and 14 May respectively, should provide additional clues on the direction of interest rates.

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