UPS chief executive David Abney was on CNBC’s “Squawk on the Street” on Tuesday, talking about Amazon, the holiday season and evolving business models.
He was also asked about America’s two-speed economy. To recap, US manufacturing is pretty banged up right now, yet consumer spending looks to be strong.
UPS is something of a bellweather for the economy, and his answer was telling.
In short, the gap between manufacturing and consumer spending remains in situ, and there is no evidence at ths point to suggest it is going to change any time soon.
Here is what he said (emphasis ours):
“You know, we are really seeing the same thing. We said last time mixed views. And when you looked at consumer spending, you get a little encouraged and we felt good about that. And I think that show during the peak of this year. But then when you look at industrial production and the activity that the Fed is driving, you’re just not seeing the same growth. So it carried on into the fourth quarter as we thought. And going into the first quarter of next year, we’ve really got to see if this increased customer’s spending, is that really going to start driving industrial production? Now with the strength of the dollar and some other factors, we’re just not seeing it. But we’re hopeful to see that change come first of the year.