UPS has delivered a stark warning to the White House and Congress that U.S. economic growth will fall to an anemic annual rate of 1 percent by Election Day.
The company’s leaders on Tuesday said U.S. businesses are in danger of going over the fiscal cliff because of Washington’s inability to get anything done.
The packaging company is often seen as a useful barometer for the broader business community. If business is bustling at UPS and the company’s brown-uniformed drivers are hustling around the country and world to deliver packages, it is a sign of the economy’s strength.
Conversely, if business is slow at UPS, policymakers should pay attention, especially in an election year.
On Tuesday, UPS reduced its forecast for 2012, saying it expected GDP growth to be 1 percent in the second half of the year. Critically, it reported no growth in its business-to-business income in the second quarter; 60 percent of the company’s business comes from companies sending each other packages.