Through TheFLY's Eyes: FedEx

from Theflyonthewall.com












FedEx And The Economy

Wall Street and the financial world rely on a variety of standardized statistics to continually gauge the strength of the U.S. economy, including the consumer price index, monthly job creation, and unemployment claims.

But Wall Street also looks to informal statistics for economic clues, including orders for corrugated box orders and package deliveries. Box stats are followed because when they are trending up long-term, it’s usually a sign that orders for consumer and wholesale goods are increasing. Similarly, package deliveries are another barometer, for when package deliveries increase for months, it’s usually a sign that spending is solid.

Is a substantial economic slowdown underway? A FedEx (FDX) report suggests otherwise.

FedEx said that during the recently-completed fiscal year 2006, ground volume was up 11%, with overall shipments up 8% - stats that boosted FedEx’s fiscal 2006 profits by 27%.

Further, FedEx had kind remarks for the U.S. economy: the company expects calendar 2006 U.S. GDP growth of 3.0%-3.2%, believes the U.S. industrial sector is still in good health, and also has a positive outlook regarding the global economy.

“We remain optimistic about the global economic environment for fiscal 2007 and our ability to effectively manage our business," said Frederick Smith, FedEx’s CEO.

Those stats and comments don’t guarantee that the U.S. economy will continue to grow at a robust pace, but they do suggest that the much-feared substantial slowdown is perhaps not at hand.