US consumption potential is about to pick up! Amazon scales back Prime Air plans

In the past two days, the US government released the latest employment and inflation data for January, showing that the United States added 510,000 non-farm jobs last month, bringing the unemployment rate to the lowest level in 53 years!

According to statistics, the unemployment rate in the United States last month has dropped to 3.4%, which is much lower than expected and has hit the lowest unemployment rate since 1969. On July 16 of that year, the United States successfully landed on the moon and became a beacon to the world. It can be said that it was the peak period of the United States' national strength. The current unemployment rate is close to that time, which is a very rare situation.

At the same time, the average hourly wage in January has also been growing steadily, up 0.3% from the previous month, which is basically in line with the agency's forecast. The record low unemployment rate is a good thing. You can think about it. A low unemployment rate means that more Americans have jobs and sources of income, and these stable jobs bring stable income. With stable income, consumers will gradually relax their spending.

And there are reports that the Federal Reserve will continue to raise interest rates this year, at least until May, and the rate hike will not be less than 25 basis points. This will further suppress the inflation rate in the United States, control the soaring prices and living costs, especially oil prices, and particularly affect consumers' spending elsewhere. Therefore , the policy of raising interest rates will continue to have a positive effect on the recovery of consumption potential.

Therefore, as long as the US retail market can maintain this momentum this year, it is only a matter of time before the US retail market reverses last year's consumption slump. Amazon is also adjusting its FBA logistics system to prepare for this consumption recovery.

In the past two days, ATGS (Air Transport Services Group) announced that Amazon has reached an agreement with ATGS to reduce its cargo aircraft leasing plan this year to adapt to US economic growth and logistics changes in the first half of 2023.

According to the information I have found, in 2020 and 2021, Amazon decided to expand its air transportation efforts to make up for the lack of capacity due to widespread congestion and delays at US ports.

However, as the consumption peak brought by the epidemic gradually subsided, coupled with factors such as the easing of port congestion and the increase in shipping capacity, Prime Air's air transport capacity gradually overflowed, and in order not to be taken advantage of, Amazon resolutely cut off the renewal plans of many cargo aircraft.

However, this does not mean that Amazon is pessimistic about this year's consumer power. On the contrary, Amazon is also increasing its investment in non-air transportation, such as providing more driver positions and increasing fleet investment . This shows that Amazon is still optimistic about the recovery of the US economy and consumer power this year. However, with the weakening of the epidemic effect and a more open environment, this year's transportation structure will be more biased towards more economical ground transportation routes. Therefore, it is very reasonable to cut off the air transportation routes that are too expensive but useless.