UPS’s (NYSE:UPS) Q4 2022 earnings results were released today making this an ideal time to review the most important economic question of the day: Will there be a recession? How investors navigate the unfolding answer will have wide-ranging portfolio consequences over the coming years.
Will There Be a Recession?
FedEx (NYSE:FDX) reported its fiscal Q2 2023 results on December 20, 2022. As a result, we now have the top two shipping firms in hand to directly take the pulse of the economy. As shipping is a coincident economic activity, it serves as an excellent real-time indicator of the stage of the economic cycle.
Shipping Volume
A great signal of the real economy is shipping volume. It is a pure measure of real-world economic activity and removes inflationary effects. Keeping it simple has a certain elegance in the daily barrage of information.
In reviewing the shipping volumes of UPS and FedEx below, it will become clear that there is a broad-based decline in the volume of economic activity. In terms of shipping volume, economic contraction is a multi-quarter, well-established trend.
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