More signs of economic improvement

Macroeconomics
· US continued to post positive economic news. Housing starts rose to the highest level in 9 months and manufacturing in the Philadelphia region expanded more than expected. Housing starts and building permits index rose 1.5% and 2.7% respectively, led by construction of multifamily dwellings. The Fed of Philadelphia said its general economic index jumped to 14.1 in Sep from 4.2 in Aug. In addition, initial jobless claims fell to 545,000 from a revised 557,000 WOW. The job market may be starting to stabilize as government and private reports reinforce forecasts that economic growth will resume this quarter.

· UK retail sales unexpectedly stalled in Aug, a sign that consumers are cutting back on spending as unemployment rises. Consumers are struggling to pay off record debts of £1.5trn. However, Europe’s trade surplus rises to highest in 5 years in Jul on increasing exports, adding to signs the region’s economy is emerging from the recession. Exports climbed to 4.1% while imports contracted 0.3% in July, and the trade surplus jumped to £6.8bn from £2.3bn. Construction output fell 2% in Jul.

· At home, manufacturing sales sank at a slower pace of 22.4% in July compared to a fall of 25.3% in Jun, attribute by poor performance of the iron and steel sector as well as the computer industry, amid lower demand due to global economic slowdown. Current account surplus fell to RM28.76bn in 1Q compared to RM31.42bn in the preceding quarter