Ghost of 2008 Haunts Fed

Companies’ quicker response to possible slowing produces ‘fits and starts’ in business cycle.

United Parcel Service Inc. computer systems monitoring the heartbeat of global commerce sent a discouraging message last quarter as package flows began to fall below the company’s forecast.

On July 24 executives announced that they were reducing their Asian air network by 10 percent. Domestic routes were also fine-tuned to lower volumes by systems called Volcano and HFNO that efficiently plan how packages move on planes and trucks to consumers’ doorsteps.

Jagged Growth

Growth slowed to a 2 percent and 1.5 annual pace in the first and second quarters after expanding 4.1 percent in the final three months of last year. Retail sales fell for a third straight month in June, after rising the previous three months. The National Federation of Independent Business’ optimism index fell to 91.4 in June, the lowest reading since October, from 94.4 in May. That was the biggest monthly decline in two years.

Volatile Index

An index of U.S. economic policy he constructed rose 67.1 points for the three months ending June, the biggest jump since the U.S. debt ceiling dispute in July and August last year. It’s based on three components: newspaper coverage of policy-related uncertainty, the number of federal tax code provisions set to expire in future years and disagreement among economic forecasters.

Auto Market

Ehlers and the company’s team of network managers shifted locomotives, rail cars, their attention and even people from south to north to serve the booming auto market.

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