Economy Highlights

US - Index of leading economic indicators climbs 0.1%

The index of US leading indicators rose in January for the seventh straight month, signaling the expansion will extend into this year. The Conference Board’s gauge of the outlook for the next three to six months increased 0.1% after rising 0.8% in December, the New York-based group said. The median forecast of economists surveyed was for a 0.2% gain. (Bloomberg)


US - Consumer prices rise more than forecast

Rising global demand for food and fuel pushed up the US cost of living more than forecast in January, a sign the risk of a damaging drop in prices is ebbing. The consumer-price index advanced 0.4% for a second month, led by the biggest increase in food costs in more than two years, according to figures from the Labor Department. Other reports showed manufacturing is bolstering the expansion, and consumer confidence is being buffeted by rising household expenses. (Bloomberg)


US - Fed tells banks to test capital for recession

The Federal Reserve ordered the 19 largest US banks to test their capital levels against a scenario of renewed recession with unemployment rising above 11%, said two people with knowledge of the review. The banks stress-tested the performance of their loans, securities, earnings, and capital against at least three possible economic outcomes as part of a broader capital-planning exercise. The banks, including some seeking to increase dividends cut during the financial crisis, submitted their plans last month. The Fed will finish its review in March. (Bloomberg)


China - Foreign investment rose 23.4% in January

Foreign direct investment in China climbed in January, adding to record inflows last year that are complicating Premier Wen Jiabao’s efforts to tame inflation in the world’s fastest-growing major economy. Investment rose 23.4% to USD10bn last month from a year earlier, the Ministry of Commerce said. Estimates of four economists surveyed ranged from an increase of 10% to 23%. (Bloomberg)


Singapore - Raises inflation forecast on record growth

Singapore raised its inflation and export forecasts for 2011 after the economy expanded at a record pace last year, sustaining pressure on the central bank to allow greater currency appreciation. Consumer prices may climb as much as 4% this year while exports may rise 10%, the trade ministry said. The economy expanded a revised 14.5% in 2010, with gross domestic product growing an annualized 3.9% in the three months to 31 Dec from the previous quarter, it said. (Bloomberg)