What UPS says about the economy
The shipping company is optimistic about the country's economic future. Now if only its customers were as well.
You can tell from executives' comments that they see a recovery within reach. We're so close, and they're enthusiastic. But there is still too much uncertainty, too many question marks blocking the way.
"Over the last month or so, we are starting to see better economic numbers, so there is more optimism out there, and that could turn things around," chief executive Scott Davis told analysts on the company's earnings call Tuesday. "We are still expecting a slow-growth economy, but I don't think it is as negative as people were thinking two and three months ago."
The company's chief financial officer also took an optimistic tone. "It's good to see the U.S. firm up," he told Dow Jones. "We're excited about the holidays."
The comments were particularly striking because they came on the same day as reports showing U.S. consumers are extremely negative about the economy. Consumer confidence is at its lowest point since March 2009, according to The Conference Board, a private research group. That doesn't bode well for the holiday season.
So who's right, UPS or American consumers?
UPS and rival FedEx (FDX) are closely watched as economic indicators. At any given moment, UPS is generally transporting 2% of the world's gross domestic product and 6% of the U.S. gross domestic product, reports TheStreet.
UPS sees the global picture and the short-term future in ways that American consumers can't. What I gather from executive comments is this: We're still not out of the woods, but the trend lines are turning back up. It doesn't look like a double-dip recession is on the way.
The company said people simply stopped buying goods in the third quarter. That led to flat growth in overall package volume. One of the biggest drops was in shipments from China to the United States.
It's hard for UPS to make a definitive call for the fourth quarter. People aren't making holiday purchases yet, but it's unclear if those purchases are being pushed into the fourth quarter. UPS thinks package volume could grow 1% to 2% in the fourth quarter, but hinted that increased demand could spur a late surge in shipments.
"Consumer demand for the holidays remains to be seen," Davis said.
UPS said its third-quarter profit was $1.04 billion, or $1.06 a share. That was a penny more than analysts had expected. Revenue was $13.17 billion, about what analysts expected. Operating margin fell to 12.3% from 13.3%.
FedEx might be feeling better about the economy as well. In September, the company cut its full-year forecast and said it expected sluggish economic growth.
But this week, the company said online shopping will help it reach record shipments this holiday. The workload will be so strong that FedEx plans to add 20,000 seasonal workers -- about 18% more than last year.
So is the U.S. sluggish or recovering? Right now, we seem to be walking the fine line in between.
Nothing will change until we get ALL the lobbyist out of Washington, it will be business as usual.
u got problems?--how about brain cancer--get laid off--and pay $65 a day for healthcare--
cutting back on spending---example what I have done
no going out to see movies
no eating out
cancelled netflix dvd rentals--just instant view
cancelled newspaper-magazines--trash service-shop at basic food stores(aldi)--got onto brothers family plan for cellphone--my share $10month--was paying $45 month-no vacations
fix things yourself--hire someone-joke--auto mechanics $100 hr.--
greed-corruption--moron politicians--greedy millionairs-billionairs--spending $billion a day for our military-home security--fixing other country problems-organic foods--forget that--
Prices are so high because the Democrates believe in over the edge green technology that is shutting down the production of less expensive means of energy. Like coal and drilling for our own oil. Coal plants are closing and we get sued by tree huggers when we want to drill for our own oil. Americans are becoming more and more dependant on foreign nations who hate us.
People are struggling because there are no jobs. All the regulation that is being placed on the private sector has sent so many jobs overseas and the unions are destroying most of the private sector jobs so that manufacturing is going across the border and overseas. Now the unions are collapsing the rest of the country because they are entrenched in the public sector, where unions don't belong, and now we are stuck with higher taxes to pay unsustainable pensions that these public sector teachers and cubicle workers think they are entitled to. The problem with unions is that they think your money is their money but at some point you always run out of other people's money.
The economy will be slow until the over regulating stops, the over taxing of the small business which creates most of the private sector jobs stops and like I said before get the unions out of the picture. You know who is going to pay for all this don't you? The middle class because B.O. is here is CA and the rich are paying 35,000 a plate to go to his fundraising dinners. If I hear B.O. say one more time 'lets tax the rich' I am going to vomit. The rich are his freinds so he will not be taxing the rich anytime soon.
I have to ask this question: "What made Americans so stup!d?"
The US Economy will NEVER "Recover" until the Cause of the $60-100 Trillion USDs "Global Economic Crisis" is stopped. The "Global Economic Crisis" consisting of the "Mortgage Crisis"*, "Wall Street Crisis"*, "Financial Crisis"*, "Banking Crisis"*, "Credit Crisis"*, etc.. as made legal by eliminating those Laws that previously made the Causes of previous Depressions Illegal.
*What is occurring now are the same symptoms and indicators of Previous Depressions, as to why the US is NOT in a "Recession" but is in a Depression.
Because President Obama is doing nothing to Reinstate these Laws, the next "Crisis" of $54.6 Trillion USDs will permanently sink the US and US Allies (that also removed their versions of the US Laws) into a Depression worse than the Global Great Depression (people were literally starving to death). The average person back then had "Lost the Farm", "Wall Street employees were jumping of the tops of building", "Banks were closing", "People were running to the Banks withdrawing all their money", "Business could not get any loans (Credit Crisis) and were closing", "people were eating "Hobo Stew" made of dog food", "extortion of Labor Unions lost all effectiveness as unemployment was 25% or more", etc.. These were the situations that President FDR got the US out of, by: Nationalizations of US Industry (start of the Defense Military Industrial Complex), Suspension of US Labor Union Activities, selling England the War Materials made at his Nationalized US Industry prior to US entry into WWII, start of President FDR's Universal Health Care for All US Citizens (by getting the Insurance Corporations out of the Medical Profession), as the "New Deal to the American People" failed miserably and only prolonged the Great Depression by spending money no one had.
I think both john 111 and Sunny Calif. have a valid point. Voting out the incumbents won't do any good if it isn't done consistently. To make that idea work, ALL the voters would have to agree to get rid of them EVERY election. Maybe if the professional politicians realized that they weren't going to be living on 'welfare by politics' they'd actually start doing the job the forefathers meant them to be doing. Of course, we'd also have to get rid of the 'pension for life' laws guaranteeing even a one-termer pay forever. Think that will happen anytime soon?
Who's head is in the sand?
The UPS is a good indicator. Unfortunately or not, it's by far not the only one. It only measures a certain thing certain ways. Heck, even a simple gallon of milk can be an economic indicator to a degree because it's a basic useable item. But, not with juggling games that super markets play sometimes. Other things have to be calculated on top of that to realize a true indicator because some things are manipulated out of what their own true value is.
Real economic success is directly tied to society in how they feel or are treated. The actual conditions & not by mere wishful thinking, conditioning or stroking. - Duh?
Right now, many people feel betrayed gouged and manipulated by government & business ethics because of their present surroundings & conditions. And, that's not a good indicator at all. IE: Oil is what right now? Where are fuel prices in comparison? What was the past comparison? Quality / standard of life? Employment? Grocery prices in general? Housing? General stability? High / low? Bled dry by who & what for what? Greed, ignorance? Both?
Our national economic condition is directly tied to one of general welfare in a very general sense of other conditions. Right now, the nations capitol can't get it's head out of it's collective whatever. Leaders, supposed leaders, are acting like spoiled idealistic adolescent brats with little to no accountability. Not a good sign. It's no different than the average household, just on a larger scale. What effects one, effects the other. Sometimes in the same way & sometimes in different ways.
Until most people see those things for what they really are and correct them, the economy is not going to recover any time soon. UPS ideals or not. Measuring commerce in certain ways only is not the only indicator of a true economic success when other things are so far out of synch is it?
Quote from JJ "now we are stuck with higher taxes to pay unsustainable pensions that these public sector teachers and cubicle workers think they are entitled to"
I AM entitled to my pension... I paid for half of it AND the state gov't FORCED me to get into this program. So YES I WANT MY MONEY!
Now... if they would've let me opt-out I would have. I need the money now rather than later AND once I get to the point where it's "extra" income (or as ALL govt calls it... including tea baggers... my disposable income) I would MUCH rather have the choice on how/where/when to invest.
I don't know why you people hate teachers so much. You should be thanking them. You can read this post and reply to it.
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