Thursday, December 15, 2011

Economy: What FedEx Wants To Tell Us

If we believe the media and the majority of the pundits then the next recession is just lurking behind the corner. But if we take a look how the companies do, we get a different picture. This morning FedEx reported strong numbers for the 2nd  quarter of their business year (till November 30). Their profit jumped 76% compared to last year, their sales rose 10%. The management cited strong holiday retail sales, the growing popularity of online shopping and continuing global economic growth as the primary drivers.

FedEx is an economic bellwether "because it moves goods ranging from pharmaceuticals to financial documents and electronics from China", explain Bloomberg (bloomberg) and MarketWatch (marketwatch). Their business depends strongly on global trade streams and reacts very sensibly to the ups and downs of the world economy and the global retail sales, especially e-commerce. The FedEx numbers are another sign that at least the U.S. economy is in better shape than many think and that the important Christmas season is doing well.

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