EXTERNAL TRADE: 2008 exports start strong
 Merchandise exports remained vibrant in the first two months of 2008, growing 12.1% in value, due to rapid growth on the Mainland and in many other Asian markets, as well as the continued expansion of the European Union market, which together offset the negative effect from the sluggish U.S. market. The external outlook is dominated by uncertainties, however, in particular the weakening U.S. economy and ongoing financial turbulence. Nonetheless, the strong growth momentum in many emerging markets should continue to support Hong Kong external trade.
RETAIL SALES: Spending remains vibrant
 Spending in the local market remained vibrant at the start of 2008, with retail sales volume up 11.1% during the first two months combined.
The retail sector benefited from the expansion of inbound tourism.
PROPERTY: Strong demand continues
The property market’s growth streak continued during the first two months of 2008, with the number of sale and purchase agreements remaining above 10,000 for the 11th consecutive month. With sentiment buoyed by interest rate cuts and the continued improvement in the labor market, apartment prices and rentals grew in January and February. The pace of increase in apartment prices appeared to slow in February, according to provisional figures, with sentiment slightly dampened by the decline in the stock market.
LABOR MARKET: Unemployment rate at 3.3%
 The seasonally adjusted unemployment rate for December 2007-February 2008 edged down to 3.3%, the lowest in 10 years.
Demand for labor remained robust as employment grew at a year-on-year rate of 2%, outstripping the labor force.
Note: (*) Figures used are 3-month averages
COMPOSITE CPI: Inflation at 4.8%
Underlying Composite Consumer Price Index (CPI) inflation grew to an average of 4.8% in the first two months of 2008. Apart from the sustained above-trend economic growth, the increase was mostly due to a surge in global food prices. Inflationary pressure is expected to continue due to elevated food and oil prices, renminbi appreciation and U.S. dollar weakness, as well as to the rising trends of local labor and rental costs.
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