Hong Kong Defies Bears as Jobless Rate Drops to Near 20-Year Low

(Bloomberg) -- Hong Kong’s economy continues to defy its skeptics.

It was meant to be the year when monetary tightening from the Federal Reserve, which dictates the city’s interest rates thanks to the local currency’s peg to the greenback, would prick a property bubble. And it was assumed that mainlanders would keep a firm grasp on their wallets, hurting sales across the marble-clad malls of Central.

But it hasn’t turned out as the naysayers thought. Employment data Thursday showed the jobless rate is now at its lowest level since early 1998.

“Labor market conditions will likely remain tight in the near-term amid the further solid growth of the local economy,” Law Chi-kwong, Hong Kong’s secretary for labor and welfare, said in the data release.

Hong Kong Defies Bears as Jobless Rate Drops to Near 20-Year Low

The jobs numbers are but the latest in a string of positive data:

  • GDP has grown at least 3 percent year-over-year for four straight quarters
  • Retail sales value and volume both jumped the most since February 2015 in September, and both measures are now on the upswing after two years of losses
  • Real wages meanwhile have gained for nine straight quarters going back to March 2015. That’s a far cry from the "enormous stress" some analysts have forecast.

Maybe Chuck Norris’s character Josh Randall had it right when he closed out the early 1980s movie "Forced Vengeance" with the line:

"This is a city of survivors. And whatever happens, Hong Kong will always be THE place."

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