Yesterday, the Fed announced they have lowered their estimate of GDP growth this year from their 3.9% estimate in January and 3.5% in April to only 2.9% now. They also lowered their estimate of next year's growth from 4% to 3.7%. It is not a pretty picture. They blamed "transitory" factors, such as the Japan tragedy and the "Arab Spring."
The same day, Fedex announced its profits had jumped 33%. Their forecast of GDP growth in the U.S. is only 2.5% this year and 3.0% next year, which is lower than the Fed. So, where did Fedex get their 6% increase in shipping volume? From the emerging markets, of course!
The good news is that Fedex and the Fed agree that the second half of this year will be better than the first half!
Is there a lesson in this? Yes, the more pessimistic economists at Fedex are probably correct. Also, like a broken record, continue to look for opportunities abroad in less hidebound countries!
