USPS as Canary

The official story these days is that the U.S. economy is nearing 'the bottom' of the recession. This article from Bloomberg reports the latest unemployment estimates showing that fewer people were newly unemployed in April than in March is being heralded as somehow 'good news'. This particular expert quote from the article is especially giddy (complete with typo):

“We’re seeing a very clear bottoming pattern,” said John Herrmann, chief economist at Herrmann Forecasting in Summit, New Jersey. “This holds out the possibility that the fiscal stimulus, along with consumers resuming more normal spending patters [sic], will lift the economy into positive growth in the second half.”

We wonder how tens of millions of 'consumers' with vastly reduced incomes are going to find the wherewithal to be 'resuming more normal spending patterns' in just a few months time!

The United States Postal Service reported another dismal quarter. The demise of the nation's third largest (and most ubiquitous) employer seems to be flying under the radar. The real shocker in the story is a 15% drop in volume over the last year. Rationalisations aside, the USPS is the canary in the coal mine reflecting a significant drop in economic activity.

If Americans are receiving 15% less mail, they are probably doing a lot of other things 15% less too. Eating out 15% less maybe? Kentucky Fried Chicken and Pizza Hut sales are down 14%.