Recall the dark mood of a year ago. The nation was recovering from the September 11 attacks, a war raged in Afghanistan, and the economy was in recession. But Gene Huang, chief economist at shipping giant FedEx Corp. (FDX
), was convinced the U.S. economy would forge ahead. That confidence made Huang BusinessWeek's most accurate forecaster for 2002 (table).
One key to Huang's accuracy was the trend in interest rates. Because short-term nominal rates fell below inflation by the end of 2001, consumers' real borrowing costs were negative. Auto makers' zero-rate financing amounted to a windfall for millions of consumers. "You were actually being rewarded for buying a car," says Huang. Businesses weren't so lucky. Because producer prices were falling, companies found their real borrowing costs rising. Huang foresaw this, too, correctly projecting that capital spending wouldn't perk up in 2002.
It's rare for an industrial economist to best his financial-market brethren, but Huang says working for FedEx gives him an edge over Wall Street and bank economists. Since FedEx serves every sector and region, "I have a detailed look at the economy," he says. "It's almost like an internal Beige Book," referring to the Federal Reserve's report on regional economic activity.
Huang, a native of China, reaches back to his roots to explain his 2003 outlook. In the Chinese calendar, he says, "2002 was the Year of the Horse. 2003 is the Year of the Ram." Huang describes the horse as strong but difficult to control, while the ram is more surefooted. He expects a more stable economy in 2003, with less-volatile financial markets, reduced geopolitical uncertainties, and a more coordinated focus in Washington on economic policy.
Huang, 39, graduated from Shanghai's prestigious Fudan University, where he met his wife, Christine X. Jiang, now a finance professor at the University of Memphis. When he's not following interest rates or FedEx deliveries, Huang enjoys playing the piano and painting. He's modest about his artwork, but when it came to the 2002 U.S. economy, Huang painted a very flattering portrait.
By Kathleen Madigan
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Copyright 2002, by The McGraw-Hill Companies Inc. All rights reserved.
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