Hong Kong’s labor market likely to have remained tight in January, inflation to have stayed at 1.7 pct

Hong Kong’s labor market is expected to have remained tight in the month of January, given the favorable local economic conditions. Rebound in inbound tourism and the buoyant equity market might have underpinned the overall employment situation in January. According to a DBS Bank research report, the seasonally adjusted jobless rate is likely to have remained at a 20-year low of 2.9 percent.

Meanwhile, the headline inflation is likely to have stayed at 1.7 percent in January. This is linked to the soft import prices, for instance food prices in China have been recorded year-on-year declines since February 2017. In the meantime, local labor cost growth continued to be moderate in spite of a tight labor market. The feedthrough of rental costs into the inflation was gradual.

“The launch of some new government subsidies, together with the dissipation of any upward adjustment in public housing rentals, will dampen the upside risk”, added DBS Bank.

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