American Consumers Newsletter

by Cheryl Russell, Editorial Director, New Strategist Press
August 2011

Is the United States Still a Good Bet?

1. Hot Trends: IS THE U.S. STILL A GOOD BET?

To see Cheryl Russell’s Demo Memo blog, click here.

1. Hot Trends 

Is the United States Still a Good Bet?


A recent article in the Los Angeles Times noted that U.S. companies “are beginning to give up on the American consumer as a source of future growth.” Are businesses right to give up on us? Is the United States still a good bet? Let’s look at the pros and cons from a demographic perspective.


NO. The United States is so yesterday.

1. Our population growth is slowing. For the next few decades, most of the increase will be among people aged 65 or older.

2. A new baby bust means there is little prospect for renewed growth in the United States for the foreseeable future.

3. Household spending peaked in 2006 and has fallen 5 percent since then, after adjusting for inflation. This decline is likely to continue as households pay down their debt and adjust to lower incomes.


It sure looks hopeless. But wait, there’s more…


YES. The United States is a good bet for tomorrow.

1. There are nearly 312 million Americans, making us the third largest country in the world. Not to mention the fact that we are also the richest–still.

2. There is plenty of potential growth in the United States consumer market. To tap into it requires imagination and leadership, however. Although household spending peaked in 2006, Americans have been spending lavishly since then on a range of products and services. Average household spending on pets climbed 61 percent between 2006 and 2009, after adjusting for inflation. Spending on lighting fixtures climbed 59 percent as households replaced their incandescent bulbs with compact fluorescents. Internet service spending rose 35 percent, cell phone service spending 28 percent, telephone hardware spending 29 percent, video game spending 47 percent–all during the darkest days of the Great Recession. Household spending patterns are changing, creating opportunity for forward-looking companies.

3. This too shall pass. Our current problems are temporary, a convulsion of the economy–and politics–caused by the Internet.


So is it Yes or No? For the next few decades, there is only one obstacle that stands in the way of Yes: the older generations. This is blasphemy, I know. For years we have been told how great the older generations are. They were great in their day, but that day is over, brought to a close by the Internet revolution. Yet we remain in their grip. The U.S. population is older today than ever before, and growing older by the day. Fifty-nine percent of household wealth is controlled by householders aged 55 or older–a record high and certain to climb as the entire baby-boom generation fills the older age groups.


Because older Americans control the money, they also control the politics. The politicians are doing their bidding by protecting the status quo–the pre-Internet world in which boomers and older generations grew up. This explains our political paralysis and why we are arguing over issues long ago settled in the minds of younger adults. Politically, we are trapped in the old economy, an economy where airline passengers are still being instructed on how to fasten their seat belts, where politicians try to keep us from switching to more efficient light bulbs, and where health insurance coverage for birth control is still controversial. We are trapped in the old economy because the generations that are in control the purse strings cannot conceive of the radical new world of opportunity created by the Internet.


Just because older generations are saying No doesn’t mean you can’t say Yes. The recipe for growth in the United States is threefold: hire the young, follow the Internet, and use your imagination.


By Cheryl Russell, editorial director, New Strategist Publications. If you have any questions or comments about the above Q & A, contact


The 55-to-64-age group grew 50 percent between 2000 and 2010–an increase of 12 million, accounting for 45 percent of the nation’s population growth during those years.

Source: American Marketplace

2. Q & A

How Big is the Homeownership Decline?


Homeownership rates have fallen in every age group since they peaked in 2004, and they are falling the fastest among 30-to-34-year-olds. This is because young adults are choosing not (or can’t afford) to buy as they age through their twenties and into their thirties, lowering the homeownership rate of age groups as they fill them. Between 2004 (the year the homeownership rate peaked) and the second quarter of 2011, the homeownership rate of households headed by 30-to-34-year-olds fell by 7.9 percentage points, according to the Census Bureau’s Housing Vacancy Survey. Here is a look at homeownership rates by age in the second quarter of 2011 compared with the annual rate in the peak year, 2004:


    2011   2004
   2nd qtr  annual  change
Total    65.9   69.0    -3.1
<25    21.9   25.2    -3.3
25-29    34.7   40.2    -5.5
30-34    49.5   57.4    -7.9
35-39    60.5   66.2    -5.7
40-44    66.9   71.9    -5.0
45-49    70.2   76.3    -6.1
50-54    74.3   78.3    -4.0
55-59    76.8   81.2    -4.4
60-64    79.0   82.4    -3.4
65+    80.8   81.1    -0.3

You can see some home buying taking place among young adults by comparing the homeownership rate of an age group in 2004 with the rate of the next succeeding age group in 2011. Among the 25-to-29-year-old cohort in 2004, for example, 40.2 percent owned a home. In 2011, when those 25-to-29-year-olds of 2004 were in the 30-to-34 age group, a larger 49.5 percent owned a home. So some young adults are buying, but many fewer than during the housing bubble.


That’s the good news. The bad news is that the 2010 census found a much lower homeownership rate than the Census Bureau had estimated for the same time period (65.1 percent counted by the census versus 67.0 percent estimated by the Census Bureau in the spring of 2010). This could mean that the real decline in homeownership is even worse than the above numbers look.


By Cheryl Russell, editorial director, New Strategist Publications. If you have any questions or comments about the above Q & A, contact


The number of homeowners under age 35 fell 11 percent between 2004 (the year homeownership peaked) and 2010, down by more than 1 million.

Source: American Homes

3. Cool Research Links

To keep up-to-date on ever-changing demographics and lifestyles, check out these useful links.


Pew Wealth Survey

The Pew Research Center’s important study of household wealth, based on the Census Bureau’s Survey of Income and Program Participation (SIPP), can be accessed at this link. The study examines and compares the wealth of blacks, Hispanics, Asians, and whites. These race and Hispanic origin breakdowns are especially valuable, since the Federal Reserve Board’s Survey of Consumer Finances–the only other survey that produces estimates of household wealth–lumps blacks, Hispanics, and Asians into the single group “nonwhites or Hispanics.” The topline is that non-Hispanic white and Asian households have a much higher net worth ($113,149 and $78,066, respectively) than black or Hispanic households ($5,677 and $6,325, respectively). The report shows all the details about asset ownership and debt for each group.


65 Million Grandparents

The legendary founder of American Demographics magazine, Peter Francese, is the authority behind a new and much needed study of grandparents, published by the MetLife Mature Market Institute and available at this link. One in every four American adults is a grandparent, according to the study. The number of grandparents is projected to increase rapidly over the next decade–rising from today’s 65 million to a stunning 80 million in 2020–as more baby boomers become grandparents. The median age of new grandmothers is 50. The median age of new grandfathers is 54.


Employee Benefits for Same-Sex Partners

Thirty percent of same-sex unmarried domestic partners have access to health care benefits for their partner through their employer, according to the 2011 Employee Benefits Survey. In this Bureau of Labor Statistics’ survey, for the first time, questions were included about access to benefits for unmarried domestic partners–same sex and opposite sex. The 30 percent of same-sex partners who have access to health care benefits exceeds the 25 percent of opposite-sex partners with access.


New AARP Survey of Boomers

The AARP has published the results of a new survey of the baby-boom generation’s retirement outlook and plans, updating a survey the organization has undertaken twice before–in 1998 and 2003. This unique examination of the attitudes of working and retired boomers, with an analysis of how attitudes have changed since the upheaval of the Great Recession, is an invaluable addition to generational research. A few of the findings: 60 percent of working boomers are still optimistic about retirement, and 69 percent have a favorable view of Social Security and Medicare.


The 59 percent majority of households headed by Asians owned a home in 2010, up from 53 percent in 2000.

Source: Who We Are: Asians

4. Meet Your Customers

Here are five all new and expanded, one-stop resources for understanding American consumers–vital, cost-effective information in these economically uncertain times. All are available as hold-in-your-hand books or pdf downloads with links to Excel spreadsheets.

· The American Marketplace: Demographics and Spending Patterns, 10th ed. Quick and easy access is the goal of the new 10th edition of The American Marketplace: Demographics and Spending Patterns, your reliable alternative to the threatened Statistical Abstract. Designed for convenience,The American Marketplace draws on scores of government sources to give you a population profile of the United States in one handy volume. Its hundreds of tables are organized into 11 chapters covering attitudes, education, health, housing, income, labor force, living arrangements, population, spending, time use, and wealth. This edition of The American Marketplace contains the latest 2010 census data by age and sex, as well as population totals for states and metropolitan areas. The book includes attitudinal data from the recently released 2010 General Social Survey. Plus, you get the latest numbers on the changing housing market. Also included are 2010 labor force statistics, and the latest income data. The wealth chapters includes newly released information on what the Great Recession did to net worth, assets, and debts. The spending chapter reveals how spending patterns are changing.

ISBN 978-1-935775-27-0 (hardcover);

ISBN 978-1-935775-28-7 (paper); 642 pages; June 2011

· Americans and Their Homes: Demographics of Homeownership, 3rd ed. The all-new third edition ofAmericans and Their Homes: Demographics of Homeownership–the first update since 2005–is already creating a buzz in the real estate industry with its up-to-date look at homeownership and the housing market through 2010. InAmericans and Their Homes, which contains 50 percent more information than the previous edition, you get the very latest demographic data profiling the nation’s homeowners and renters–their age, income, household type, race, Hispanic origin and region of residence. You will also learn about their homes–heating, cooling, kitchen and laundry equipment, purchase price and value, housing costs, and much, much more. New to this edition of Americans and Their Homes is much more data on the demographics of renters and the characteristics of their homes and apartments. As it becomes more difficult to buy and sell houses, renting has become a viable alternative for millions of Americans–especially young adults. Americans and Their Homes shows you who rents and what they rent. Despite the turmoil of the Great Recession, most homeowners still have plenty of equity in their home. But a growing number are underwater. Americans and Their Homes: Demographics ofHomeownership reveals these trends and gives you the facts behind them.

ISBN 978-1-935775-29-4 (hardcover);

ISBN 978-1-935775-30-0 (paper); 624 pages; June 2011


· The Who We Are Series brings you, in three accessible volumes, which can be purchased singly or as a set, the facts you need about the size and characteristics of the country’s Asians, blacks, and Hispanics–the most rapidly growing segments of the consumer marketplace. In each volume,chapters examine attitudes, education, health, housing, income, labor force status, living arrangements, population, spending, time use, and wealth (in Blacks and Hispanics only).

New to the second edition of the Who We Are Series is a chapter on the attitudes of Asians, blacks, and Hispanics on issues ranging from happiness and trust in others to religious beliefs, political identification, and support for gay marriage. The population chapter includes 2010 census data showing numbers nationally and by state and metropolitan area. The spending chapter examines how Asians, blacks, and Hispanics prioritize their money, and the time use chapter shows how they prioritize their time. Also included in these volumes is the most recent information on the incomes, labor force participation, educational attainment, college enrollment, and living arrangements of Asians, blacks, and Hispanics. 

· Who We Are Three-Volume Series

ISBN 978-1-935775-37-9 (hardcover);

ISBN 978-1-935775-38-6 (paper); June 2011

· Who We Are: Asians 

ISBN 978-1-935775-31-7 (hardcover); ISBN 978-1-935775-32-4 (paper); 290 pages; June 2011

· Who We Are: Blacks 

ISBN 978-1-935775-33-1 (hardcover); ISBN 978-1-935775-34-8 (paper); 312 pages; June 2011

· Who We Are: Hispanics 

ISBN 978-1-935775-37-9 (hardcover); ISBN 978-1-935775-38-6 (paper); 326 pages; June 2011

For your convenience, all of New Strategist’s titles are available as searchable single- and multiple-user pdfs that are linked to spreadsheets of all the data tables in each book so you can do your own analyses and create PowerPoint presentations.


Hispanics outnumber blacks in the United States by more than 10 million, but black households outnumber Hispanic households by nearly 2 million.

Source: Who We Are Blacks
Source: Who We Are Hispanics