Tempe, Arizona-based US Airways, on track to become the world’s largest carrier once it completes its merger with AMR Corp., reported higher revenue in the second quarter as demand recovered from the effects of across-the board federal spending cuts, President Scott Kirby said on a July 24 conference call with analysts.
More Demand
“Going forward, the demand environment remains quite good for both leisure and business demand,” Kirby said on the call. “Stronger consumer confidence, business confidence and macroeconomic performance seemed to be combining to drive the improved revenue environment.”
Confidence is getting a boost from an improving labor market. Employment climbed by 202,000 a month on average in the first six months of this year, up from 180,000 in the second half of 2012, Labor Department data show.
Americans may also be feeling wealthier as real estate prices climb and stocks hold near record highs. Home values in the U.S. increased 12.2 percent in May from a year earlier, the largest advance since February 2006, according to data earlier this month from Irvine, California-based CoreLogic Inc.
The Standard & Poor’s 500 Index closed at 1,690.25 yesterday, hovering close to the record high of 1,695.53 reached on July 22.
Inflation Expectations
Today’s Michigan survey showed that Americans expect an inflation rate of 3.1 percent over the next year, up from 3 percent in June. Over the next five years, Americans expect a 2.8 percent rate of inflation, down from 2.9 percent in the previous three months.
Inflation expectations are little changed from the end of 2012. Some companies are finding they still need to cater to the price-sensitive consumer as unemployment lingers above 7 percent.
Some Wendy’s Co. “customers are just very sensitive to the economics that they face in their life,” Chief Executive Officer Emil Brolick said in a July 23 conference call to discuss second quarter earnings. “You have to give them a price value offering if you’re going to get them to come to your restaurant significantly.”