Consumer Confidence, Flying Taxis, and More!
Editor’s Note: Happy Wednesday! Thanks to the Memorial Day holiday, it’s a relatively short week. But I’m sure the headlines will more than make up for it.
Consumer Confidence Improved in May
The American consumer sure has been running the gamut of emotions lately.
According to the Conference Board’s Consumer Confidence Index, American attitudes toward the economy improved in May for the first time since March.
The Consumer Confidence Index rose to 102.0, from an upwardly revised 97.5 in April. According to Reuters, economists had been expecting the index to drop to 95.9.
When asked about the current state of the economy, survey participants responded more positively than expected, pushing the Present Situation Index to 143.1, versus 140.6 in April. In addition, the “expectations” index also rose higher, from 68.6 last month to 74.6.
However, the Expectations Index still remains below 80, which is often seen as a harbinger of an impending recession. This marked the fourth consecutive month when the Expectations Index registered below 80.
According to the survey results, a growing percentage of consumers now believe that an upcoming recession in the next 12 months is “somewhat likely” or “very likely.”
“Confidence improved in May after three consecutive months of decline,” The Conference Board Chief Economist Dana Peterson said. “Consumers’ assessment of current business conditions was slightly less positive than last month. However, the strong labor market continued to bolster consumers’ overall assessment of the present situation.
“Views of current labor market conditions improved in May, as fewer respondents said jobs were ‘hard to get,’ which outweighed a slight decline in the number who said jobs were ‘plentiful.'”
In a statement, Peterson added, “Looking ahead, fewer consumers expected deterioration in future business conditions, job availability, and income, resulting in an increase in the expectation index.
“Nonetheless, the overall confidence gauge remained within the relatively narrow range it has been hovering in for more than two years.”
Still, consumers are concerned about inflation. “According to May’s write-in responses, consumers cited prices, especially for food and groceries, as having the greatest impact on their view of the U.S. economy,” Peterson said.
“Notably, average 12-month inflation expectations ticked up from 5.3% to 5.4%. Perhaps as a consequence, the share of consumers expecting higher interest rates over the year also rose, from 55.2% to 56.2%.
“Meanwhile, consumers’ assessment of their family’s financial situation both currently and over the next six months… deteriorated slightly.”
T-Mobile to Buy Most of U.S. Cellular
Yesterday, T-Mobile (NSDQ: TMUS) announced its plans to acquire most of U.S. Cellular (NYSE: UZD), including the company’s stores. The deal has been valued at $4.4 billion and will give T-Mobile more than 4 million new customers.
According to a press release from U.S. Cellular, T-Mobile will acquire roughly 30% of U.S. Cellular’s wireless spectrum. The wireless giant intends to use the spectrum to expand its coverage of rural areas. In addition, T-Mobile will lease space on at least 2,100 U.S. Cellular towers. T-Mobile will also be able to extend the lease terms on roughly 600 U.S. Cellular Towers where T-Mobile has already been a tenant.
Customers will be able to continue with their U.S. Cellular plans or switch to a T-Mobile plan.
This acquisition follows on the heels of T-Mobile’s purchase of Ka-ena, Mint Mobile’s parent company. That $1.35 billion deal was approved by the U.S. Federal Communications Commission (FCC) in April.
And it’s likely we’ll see further consolidation in the wireless space.
“The writing is on the wall for the carriers,” Wedbush Securities analyst Dan Ives noted. “Consolidation is now on the horizon and could speed up into 2025. This is the first shot across the bow in the wireless world, and we expect more deals over the next year.”
Get Ready for Flying Taxis
Believe it or not, we might be getting closer to living in a Jetsons-like world where taking a flying taxi to work is a normal occurrence.
Last week, the U.S. Federal Aviation Administration (FAA) issued its final airworthiness criteria for the Midnight aircraft made by Archer Aviation (NYSE: ACHR).
Archer makes what’s known as “electric vertical takeoff and landing,” or eVTOL aircraft. These aircraft are basically battery-operated helicopters. Most eVTOL-focused work has been done in the development of flying taxis that can carry passengers over short distances.
The finalization of the Archer Midnight’s airworthiness criteria means that the company has come one step closer to turning the science-fiction dream of flying taxis into reality. Back in March, Joby Aviation (NYSE: JOBY) became the first aviation company to make it this far in the FAA’s certification process.
Meanwhile, Archer is preparing to start piloted flight testing of its Midnight craft in the second half of 2024.
“Midnight is one giant step closer to taking passengers into the sky in the coming years in the U.S. The final airworthiness criteria for Midnight is an important step on our journey to make electric flying taxis an everyday reality,” Archer Chief Regulatory Affairs Officer Billy Nolen said.
Of course, it probably doesn’t hurt that Nolen served as acting administrator of the FAA from April 2022 to June 2023.
According to Archer, its flying taxis will be able to replace a 60- to 90-minute car commute with a 10- to 20-minute flight.
As a development-stage company, Archer Aviation has yet to turn a profit or dazzle Wall Street with revenue growth. As a result, its stock has been highly volatile.
Since Archer’s stock market debut, ACHR has lost more than 67% of its value. And year to date, the stock is down by more than 43%.
However, as Archer gets closer to launching its first flying taxi, there’s potential for the stock to soar.
This should be a fun one to watch.
What’s Bugging Americans?
According to Statista Consumer Insights surveys conducted in 2019/2020 and 2023/2024, there’s been a shift in the biggest concerns of U.S. adults.
In the earlier survey, the top worry was “health and social security.” This could have been in response to the COVID-19 pandemic.
However, by 2023, that concern had dropped to third place.
Instead, the more recent survey shows that the top concern for the majority of U.S. adults is now inflation and the cost of living. In addition, a growing number of respondents have become worried about poverty — a concern that didn’t even make the top eight responses of the earlier survey. Plus, housing has jumped six places to become the fifth largest concern.
Take a look:
You will find more infographics at Statista
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