Yesterday's news suggests that the US consumer remains resilient, but for how much longer remains -- as ever -- a big question mark.
The Census Bureau yesterday reported record new home sales in March: up 12.2 percent from February. However, the Conference Board's Consumer Confidence Index declined in April to 97.7 from 103.0 in March. Lynn Franco, Director of The Conference Board’s Consumer Research Center, was quoted as saying:
Despite the decline, the Present Situation Index remains at levels indicative of a healthy economy. However, the Expectations Index is now at its lowest level since July 2003 when it registered 86.3. Looking ahead, consumers do not anticipate an improvement in economic growth nor in their incomes. And, they expect an even tighter job market over the summer months.
Today, the World Bank says that it expects East Asia's economies excluding Japan to grow 6 percent in 2005 after last year's 7.2 percent growth. China is expected to slow down to just over 8 percent growth this year and 7.5 percent in 2006.
That I guess, would qualify as a soft landing. And such a soft landing would surely be appreciated by Singapore.
Yesterday, the Economic Development Board reported that Singapore's manufacturing output contracted 1.7 percent in March on a seasonally-adjusted month-on-month basis, the third straight monthly decline, while the Department of Statistics reported that the consumer price index in March declined by 0.1 percent over the previous month and rose 0.4 percent over March 2004.
Falling consumer prices in the midst of rising oil prices look strange. The Monetary Authority of Singapore's underlying inflation measure is almost certainly higher, though. And the latest figures are consistent with the MAS's forecast of 0-1 percent headline inflation for 2005 made in its policy statement a fortnight ago.
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