Lame Stream Press Economic Forecasts and the Real World of FedEx

Russ Steele

The real world is made up of numbers. No models, just real time data collected by commercial activities like FedEx.  I have always been interested in how to track economic activity in our County. A very knowledgable person once suggested that UPS and FedEx knew more about the economic health of Nevada County, than any public agency in the County, including the Economic Resource Council. However, they were not interested in sharing their data with the public agencies.

Now we learn this from a Power Line Post by Steven Hayward:

The economy is supposedly improving, but even if we took the falling unemployment rate at face value, there are too many signs that something is wrong.  There are too many anomalies.  I noted a few weeks ago the anomaly of collapsing gasoline and diesel fuel consumption, which started well before the current run-up in pump prices that is causing Obama to contort himself in unnatural ways.  Falling fuel consumption ahead of a price spike isn’t consistent with a growing economy.

Today the Wall Street Journal takes note of one of my favorite indicators: Federal Express package shipping activity.  Demand for package delivery is about as real-time an indicator as you can get, and doesn’t depend on survey data, statistical modeling, and “seasonal adjustment.”  Today’s headline is “FedEx Scales Back Economic Forecasts.”  The story says FedEx’s U.S. package delivery volume was off by 4 percent last quarter.  They’re scaling back their own in-house economic forecast for the rest of the year.  They’re going to take some planes out of service and park them in the desert, and shrink their workforce through attrition.  Stay tuned. 

Yes, stay tuned. The best indicator of economic activity in Nevada County is the number of UPS and FedEx trucks that come to our neighborhoods, and the above would indicate there will be fewer in the future.  They are the most visible indicators of economic activity in our community, which has thousands of in home businesses. No fewer FedEx trucks means no local business growth.



About Russ Steele
Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.

3 Responses to Lame Stream Press Economic Forecasts and the Real World of FedEx

  1. Someone did the same analysis a few years ago about the sale of diapers in Europe. Less and less every year. Now we see the results. No young people to pay for the semi-old farts pensions.

  2. B White says:

    My intent is not to throw cold water on the premise of this deduction. I would caution that there could be another extraordinary factor that may be skewing this idea. It was on December 19th that the FedEx delivery man threw that monitor over the fence. Now you may not think that this would have that large of an effect on FedEx’s business but it may have. After this happened the drivers all said they were hearing about it from all the customers. Not only FedEx but the UPS guys were also getting pounded with it. Around that time FedEx was having a lot of trouble with their private Ground contractors. I think they have made some changes recently in that area.

    Now if you consider that December 19th is to late in the quarter for it to effect that quarter to that degree, consider that you don’t know what FedEx’s physical quarter is. It may be December 1st through February 29th or November 1st through January 31st.

    What needs to be done to see if this incident did have an effect is to take a look at UPS activity over the same period. That may be very difficult if UPS’s quarter is different and I can think of many reasons why that might be that case.

    Can You?

    • Brad Croul says:

      Yes, I wonder what UPS forecasters are saying as well. I also have noticed a new kid on the block, OnTrac, that services the western US. Are there also other, possibly lower priced, carriers out there as well?

      Last time I had to overnight a letter it cost me $50. That’s ridiculous! The post office should be able to get more of this type of business, even at 50 cents!

      There is also the possibility of folks “buying local”.

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