Hong Kong stirs consumer spending.

Hong Kong, like many of the world's market economies, is worried about the slowdown of the economy of the United States (US). In its monthly report on the Hong Kong economy, the Economic Analysis Division of Hong Kong's Financial secretary's Office said that "downside risks from the US economy," required "close monitoring." Of principal concern were US difficulties in the sub prime US mortgage market.

Other than that, the report said, "The economy is in good shape, with both external and domestic demand holding up well."

Hong Kong's labor situation is quite favorable. The unemployment rate was 4.3 percent in February 2007, which, according to the Financial Secretary's report is the lowest in eight years. Because the employment situation has improved so dramatically, wages have increased, and this stimulates consumer spending. The report says, "Retail sales posted a vibrant growth in the first two months of the year, signifying continued robust consumption demand locally."

Among the sectors showing strength was financial services. Payroll here led the way in what the Financial Secretary called, "vibrant business activity."

Consumer spending was also enhanced by a one month waiver of rent in public housing. The waiver took effect in February 2007.

While consumer spending has pushed inflation up somewhat, the Financial Secretary's report did not express much concern that inflation would be a problem during the rest of 2007. The Hong Kong economy is expected to maintain its robustness with the following caveat. Hong Kong, "depends crucially on whether the global economic momentum can sustain," said the Financial Secretary.