US economy shows strength, oil touches US$60 but no inflation in HK and Singapore

Yesterday's news indicate that the US economy remains strong.

Sales of previously owned homes and condominiums dipped 0.7 percent last month, according to the National Association of Realtors. That left sales at a seasonally-adjusted annual rate of 7.13 million units, the second-highest level on record. The median home price rose to an all-time record of $207,000.

Meanwhile, the Labor Department reported that new claims for unemployment benefits fell by 20,000 last week to total 314,000, the lowest level in two months.

The rise of oil prices above US$60 a barrel briefly yesterday may threaten growth, but in a sense, that rise is also a sign of economic strength. The US stock market, though, wasn't very convinced, with the major stock indices falling 1 percent or more yesterday.

High oil prices, though, are among the few indications of inflation in the world. Inflation globally has not been as great a threat as previously feared.

This is especially the case in Hong Kong and Singapore. Hong Kong's consumer prices rose just 0.8 percent in May from the year before, while Singapore's was flat.