U.S. Economy On The Brink? Both FedEx And Rail Giant Norfolk Southern Warns Of A Sharp Slowdown In U.S. Economic Activities In Coming Months

Rail Giant Norfolk Southern Gives Horrible Q3 Warning

Management now expects to earn $1.18 to $1.25 per share.

Analysts were looking for $1.64.

Management blames “volume declines in certain markets and lower revenues from fuel surcharges.”

Because railroaders transport a broad array of goods, they are considered extremely important indicaters of the economy.

FedEx Says Economy Is Worsening, Cuts Outlook

FedEx lowered its fiscal 2013 profit target on Tuesday, saying earnings could slide as much as 6 percent for the year, as a weakening world economy prompts customers to shift toward lower-priced and slower shipping options.

“Weak global economic conditions dampened revenue growth (and) drove a shift by our customers to our deferred services,” Chief Financial Officer Alan Graf said in a statement.

“The downward revision reflects what has been a very difficult macroeconomic environment in general and a specifically weak environment for air express services,” said Benjamin Hartford, an analyst at Robert W. Baird & Co. “This has been a secular trend and has been more acute recently as corporations face decelerating growth and focus on managing costs.”

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How Federal Express Package Shipments Relate to the Economy



– Bloomberg Economics Brief

Chart: “Rubbish” indicator points to sharp slowdown in US economic activities

As you can see, it is now pointing to sharp contraction in economic activities.




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