November economic indicators for US, Singapore and Hong Kong

Yesterday, the US Commerce Department reported that personal income and disposable personal income (DPI) in the US both increased 0.3 percent in November while personal consumption expenditures (PCE) increased or 0.2 percent. In October, personal income and DPI had increased 0.6 percent while PCE had increased 0.8 percent, based on revised estimates.

In real terms, DPI increased 0.2 percent in November, the same increase as in October, while PCE increased by less than 0.1 percent in November compared with an increase of 0.4 percent in October

Although the consumer spending figures look anaemic, an AFP report indicates that some analysts remain sanguine about consumer spending.

"While this could be considered cause for concern, I look for a big rebound in December," said Steve Stanley, economist at RBS Greenwich Capital Markets. "Auto sales likely posted a rally in December for the third straight year, holiday sales should turn out to be decent if not spectacular, and prices, led by energy, almost certainly are falling," he said...

"November's spending gain, in combination with the strong increase in October, sets us up for a solid holiday sales showing," said Wachovia economist Gina Martin... "The picture is clouded so far by individual retailers and same store sales that have failed to meet expectations but in the aggregate sales are on pace to record a holiday season at least equivalent to last year," Martin said.

The report also mentioned that the University of Michigan's consumer sentiment index rose to 97.1 in December from 92.8 in November. It was also up from an early-December reading of 95.7.

Don't write off the American consumer yet.

Another report from the Commerce Department showed that new orders for manufactured durable goods in November increased 1.6 percent. This followed a 0.9 percent decrease in October.

On the whole, the US economy looks as though it remains relatively resilient.

Meanwhile, halfway around the world in Singapore and Hong Kong, inflation remained subdued in November. In Singapore, the consumer price index in November, at 104.3, was unchanged from October. Compared to a year ago, it rose 1.7 percent. In Hong Kong, the consumer price index rose 0.2 percent year-on-year in November, the same growth as that recorded in the previous month.

These figures should help keep interest rates in these economies low, especially in Singapore, where liquidity should be boosted by the inflow of capital anticipating further rises in the currency against the US dollar.