American Consumers Newsletter

by Cheryl Russell, Editorial Director, New Strategist Press
May 2018

Births in 2017 Lowest in 30 Years


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

1. Hot Trends 

Births in 2017 Lowest in 30 Years…
Despite the economic recovery, the baby bust continues. Only 3,853,472 babies were born in the U.S. in 2017–the lowest number since 1987, according to the National Center for Health Statistics (pdf). Except for a small increase in 2014, the number of births has fallen in every year since 2007, when births hit a record high of 4.3 million.
Number of births (in 000s)
2017: 3,853
2016: 3,946
2015: 3,978
2014: 3,988
2013: 3,932
2012: 3,953
2011: 3,954
2010: 3,999 (start of baby bust)
2009: 4,131
2008: 4,248
2007: 4,316 (record high)

The most recent decline in births is not trivial: 92,000 fewer babies were born in 2017 than in 2016, a 2 percent drop. The NCHS report is littered with record lows. The nation’s fertility rate fell to 60.2 births per 1,000 women aged 15 to 44, an all-time low. Birth rates for women aged 15 to 19, 20 to 24, and 25 to 29 fell to new record lows. Even among women in their 30s, birth rates fell between 2016 and 2017, after rising for the past few years. Women aged 40 or older were the only ones with higher birth rates in 2017.

The continuing baby bust despite the economic recovery is a surprise. While there are many possible explanations, one stands out. Young adults are economically fragile. Student loans, rising rents, unpredictable work schedules, costly day care, and the growing importance of women’s earnings to financial wellbeing are all behind the baby bust.


A “Lost Generation”?

Born in the 1980s? Then you belong to what could be a “lost generation.” This is not a tabloid headline, but the considered opinion of the Federal Reserve Bank of St. Louis (A Lost Generation? Long-Lasting Wealth Impacts of the Great Recession on Young Families). In an examination of trends in household wealth, fed researchers determined which households had recovered from the Great Recession and which had not.

For the analysis, the researchers estimated typical life cycle wealth trajectories using the 1989 through 2016 Survey of Consumer Finances. They then compared actual wealth to expected wealth for household heads born in the 1930s, 1940s, 1950s, 1960s, 1970s, and 1980s. Two stories emerged, and only one had a happy ending.

  • Here’s the story with the happy ending:By 2016, the net worth of older Americans (born in the 1930s, 1940s, and 1950s) had recovered from the Great Recession.
  • Here’s the other story:By 2016, the net worth of younger adults (born in the 1960s, 1970s, and 1980s) had not recovered from the Great Recession. Those born in the 1960s were still 11 percent short of their expected net worth in 2016. Those born in the 1970s were 18 percent short. Those born in the 1980s were even worse off. Their net worth was 34 percent short of what it should have been based on the lifecycle wealth trajectory of earlier generations.
Housing and mortgage debt explain the wealth shortfall for the 1960s and 1970s cohorts. These age groups bought homes during the housing bubble and lost equity when the bubble collapsed. Few in the 1980s cohort were homeowners during the housing bubble, so the shortfall is caused by other types of debt–student loans, auto loans, and credit card debt, say the researchers. There is still hope for those born in the 1980s, however, because of their high educational attainment and the many years of catch-up available to them. But, the feds conclude, “the 1980s cohort is at greatest risk of becoming a ‘lost generation’ for wealth accumulation.”


The New First-Time Home Buyer

The homeownership rate of households headed by people aged 30 to 34 fell to 46.3 percent in the first quarter of 2018, according to the Census Bureau, a disappointment for those who hoped the upward turn in the fourth quarter of 2017 (to 47.1 percent) was a sign of better times to come. These bobbles do not rise to the level of statistical significance, of course, but over time small upward shifts can build to something meaningful. Alas, the latest downturn suggests the upward bobble had no meaning.

This requires new thinking. Historically (before the Great Recession) homeownership became the norm (rising above 50 percent) in the 30-to-34 age group. But beginning in 2007, the homeownership rate of 30-to-34-year-olds went into a tailspin. In the second quarter of 2011, the rate fell below 50 percent for the first time. It’s been stuck there ever since. After years of watching and waiting for the age group’s homeownership rate to recover, time’s up. Demo Memo is removing the “first-time home buyer” distinction from the 30-to-34 age group and bestowing it instead on 35-to-39-year-olds. They are the nation’s new first-time home buyers–the age group in which the homeownership rate first surpasses 50 percent. Drum roll…

Homeownership rate of householders aged 35 to 39, first quarter 2018: 57.1%

There’s good news in the latest number. In the first quarter of 2018, the homeownership rate of households headed by 35-to-39-year-olds cracked the 57 percent threshold for the first time since 2012. These no-longer-young adults just might be buying homes. Feelings of jubilation should be tempered by the fact that the current homeownership rate of 35-to-39-year-olds is well below its peak rate of 65.7 percent reached in the first quarter of 2007.
Nationally, the homeownership rate was 64.2 percent in the first quarter of 2018, up from 63.9 percent one year earlier. The increase was not statistically significant.


Smartphone-Only Internet Access

Providing customers with a seamless mobile interface is critical to the success of businesses today. For proof, look no further than the findings of a recent Pew Research Centersurvey of household internet access. Fully one in five Americans does not have broadband service at home and relies on a smartphone to access the internet. This is especially true for Hispanics and younger adults…

Smartphone-only internet access at home by race/Hispanic
Whites: 14%
Blacks: 24%
Hispanics: 35%

Smartphone-only internet access at home by age
Aged 18 to 29: 28%
Aged 30 to 49: 24%
Aged 50 to 64: 16%
Aged 65-plus: 10%

Many older adults have neither broadband nor smartphone access to the internet at home–17 percent of the 50-to-64 age group and 40 percent of people aged 65-plus.


The Most Successful Entrepreneurs Are…

Does age predict entrepreneurial success? Yes, say many Americans, and they would be right. But they would be wrong about the age that predicts success. According to a recent study, it’s not youthfulness that leads to entrepreneurial success…

“We find that age indeed predicts success, and sharply, but in the opposite way that many observers and investors propose. The highest success rates in entrepreneurship come from founders in middle age and beyond.”

You read that right: “middle age and beyond.” This is the conclusion reached by researchers from  MIT and the Census Bureauafter linking IRS, Census Bureau, patent, and third-party venture capital databases. They crunched the numbers to determine the average age of founders for the 1 in 1,000 fastest growing new businesses in the past decade. Average age = 45.0. Notably, the average age of successful entrepreneurs does not vary much by industry sector, including high tech.

There’s a good reason for this surprising finding: experience is the key to success. “These findings are consistent with theories in which key entrepreneurial resources (such as human capital, financial capital, and social capital) accumulate with age,” explain the researchers. “To the extent that venture capital targets younger founders, early-stage finance appears biased against the founders with the highest likelihood of successful exits or top 1 in 1,000 growth outcomes.”


Median Annual Out-of-Pocket Health Care Costs for People Aged 70 or Older: $2,012

One of the biggest concerns of the American public is not having enough money to pay for health expenses in old age. Only 14 percent of workers and 26 percent of retirees feel “very confident” they will have enough money to pay for medical care throughout retirement, according to the 2018 Employee Benefit Research Institute’s Retirement Confidence Survey.

How much do older Americans pay out-of-pocket for medical care in their final decades of life? That question has an answer: a median of $2,012 per year in addition to the cost of health insurance, according to Sudipto Banerjee of the Employee Benefit Research Institute. He estimated the out-of-pocket medical costs of people from age 70 until death, using longitudinal data from the Health and Retirement Study. The estimate is in 2015 dollars and adjusted for medical inflation.

A couple thousand dollars a year doesn’t sound too bad. Many retirees can pay for those expenses out of current income rather than dipping into savings. But, here’s the catch–some older Americans will pay much more. Those with the bad luck to end up in the 95th percentile of medical expenses, for example, must cough up $19,103 per year out-of-pocket. It’s hard to pay bills like that without tapping into savings or running out of money altogether.

Long-term care costs are driving up out-of-pocket medical expenses for the unfortunate few. To cover those costs, retirees must drain savings accounts, and many ultimately become dependent on Medicaid–the health insurance program for the poor. By the end of life, 33 percent of retirees in the HRS study were dependent on Medicaid to cover their health care costs, up from only 11 percent who were on Medicaid at age 70.

No one knows whether they will need long-term care, but the numbers are not encouraging. Banerjee’s study shows that 38 percent of men and 51 percent of women aged 70 will receive nursing home care at some point before they die.

With the threat of long-term care costs looming, many retirees are hesitant to spend their savings. (See the Demo Memo postabout another Banerjee study showing this to be the case.) “This raises a question about whether, if such risks could be insured more efficiently, retirees would be able to spend their retirement assets more freely and whether this might improve their personal welfare and/or have positive macroeconomic effects as well,” Banerjee concludes.


How Much Have Older Workers Saved? 

Among the nation’s workers aged 55 or older, a substantial 71 percent are “somewhat” or “very” confident that they will have enough money to live comfortably throughout their retirement, according to the 2018 Retirement Confidence Survey. There’s a reason so many are confident: older workers have managed to boost their retirement savings.

The share of workers aged 55 or older who report saving little has fallen over the past few years, and the share who report substantial savings has increased, according to the survey. Fully 38 percent of workers aged 55 or older report savings of $250,000 or more in 2018, up from 25 percent in 2015. The percentage of older workers who report savings of less than $25,000 fell from 43 to 28 percent during those years.

Savings/investments of workers aged 55 or older, 2018
28% have less than $25,000
7% have $25,000 to $49,999
8% have $50,000 to $99,999
19% have $100,000 to $250,000
38% have $250,000 or more

These figures do not include the value of the primary residence. Older workers are now more likely to report having substantial savings ($250,000 or more) than little savings (less than $25,000), a crossover that occurred in 2017.


College Grads Control 74% of Wealth

More than one-third of households in the U.S. (34 percent) are headed by someone with a bachelor’s degree or more education. A study by the Federal Reserve Bank of St. Louisexamined data from the Survey of Consumer Finances to determine trends in the net worth of households by educational attainment of householder. Here are the findings…

Net worth by education, 2016 (and 1989; in 2016 dollars)
Householder is a college graduate: $291,000 ($238,000)
Householder not a college graduate: $54,000 ($66,000)

The net worth of college graduates has increased over the decades, while the net worth of householders without a college degree has declined. Consequently, households headed by college graduates now control 74 percent of household wealth, up from 50 percent in 1989.


College Grads More Likely to be Married 

At age 31, young adults with a bachelor’s degree are much more likely to be married than their less-educated counterparts, according to a Bureau of Labor Statistics’ analysisof the National Longitudinal Survey of Youth 1997. The NLSY97 is tracking the education, labor force experience, and partner status of a representative sample of people born from 1980 to 1984. This group was aged 12 to 17 at the time of their first interview in 1997 and aged 30 to 36 at the time of their 17th (!) interview in 2015-16.

Looking at the partner status of the cohort at age 31, researchers at the Bureau of Labor Statistics found fewer than half were married–41 percent of men and 49 percent of women. But among the college graduates, most were married.

Percent of men married at age 31
34.4% of those who did not graduate from high school
35.9% of high school graduates, no college
39.1% of those with some college or associate’s degree
50.1% of those with a bachelor’s degree or higher

Percent of women married at age 31
32.2% of those who did not graduate from high school
45.1% of high school graduates, no college
46.9% of those with some college or associate’s degree
56.8% of those with a bachelor’s degree or higher

Young adults are hesitant to marry (or stay married to) partners without a college degree, most likely because the lack of a degree typically results in lower earnings.


Grocery Store Winners and Losers, 2006-16

When Americans shopped for groceries a decade ago, beef was number-one on the shopping list–the item on which the average household spent the most money. Today, the number-one expenditure is fresh fruit, followed by fresh vegetables, according to a Demo Memo analysis of the Consumer Expenditure Survey. Beef is now in third place. Between 2006 and 2016, average household spending on beef–which includes everything from ground beef to steak and roasts–fell 13 percent after adjusting for inflation. In contrast, average household spending on fresh fruit climbed 24 percent, and fresh vegetable spending was up 10 percent. Here are some of grocery’s biggest winners and losers during the decade…

Selected items with double-digit gain in average household spending, 2006-16 (in 2016 dollars)
Coffee: 61%
Rice: 45%
Spices: 43%
Cream: 33%
Nuts: 30%
Butter: 29%
Eggs: 28%
Fruit, fresh: 24%
Bacon: 19%
Vegetables, fresh: 10%

Selected items with double-digit loss in average household spending, 2006-16 (in 2016 dollars)
Fish: -10%

Beef: -13%
Carbonated drinks: -15%
Fruit juice, bottled: -16%
Ice cream: -20%
Cereal: -20%
Milk, fresh: -23%
Margarine: -30%
Fruit juice, fresh: -42%
Baby food: -42%

Of course, these lists cannot determine whether our diet has improved over the decade. Although Americans are spending less on carbonated drinks and ice cream at the grocery store, they may be gorging on these items at restaurants instead.


Many Single Parents Not So Alone

Many single parents are living with a partner, reports Pew Research Centerin an analysis of the Census Bureau’s 2017 Current Population Survey. Fully 35 percent of single parents were living with a partner in 2017, up from 20 percent two decades ago in 1997.

Unmarried parents living with children under age 18
Solo mother: 53%
Solo father: 12%
Cohabiting mother: 18%
Cohabiting father: 17%

Many solo mothers and fathers aren’t so alone either. A large share live with their own parents–31 percent of solo fathers and 22 percent of solo mothers. The grandparents “could be playing an important role as caregiver to any grandchildren in the household,” says Pew.


Fishing, Hunting, and Bird Watching

If your customers are people who hunt, fish, or watch birds and other wildlife, you’re in luck. The U.S. Fish and Wildlife Service provides an in-depth look at them in its 2016 National Survey of Fishing, Hunting and Wildlife-Associated Recreation. The report provides detailed demographic, spending, and activity profiles of Americans aged 16 or older who participated in hunting, fishing, and/or wildlife observation. The survey, which is fielded by the Census Bureau every five years, has been ongoing since 1955.

Among the three recreational activities examined, wildlife watching is by far most popular. More than one-third (34 percent) of Americans aged 16 or older participated in wildlife watching in 2016 compared with 14 percent who fished and 4 percent who hunted. The survey defines wildlife watching as closely observing, feeding, and/or photographing wildlife, or visiting natural areas with wildlife observation as the primary objective.

Wildlife watching is more popular than fishing or hunting, and it is growing faster and generates more spending. Between 2006 and 2016, the number of wildlife watchers grew 21 percent–from 71 million to 86 million. The number of birdwatchers alone (45 million) almost surpasses the number of anglers and hunters combined. Wildlife watchers spent $76 billion in 2016. The number of people who fish grew from 30 million to 36 million between 2006 and 2016. Anglers spent $46 billion on fishing equipment and services in 2016. The number of hunters fell during the decade, from 12.5 million to 11.5 million. Hunters spent $26 billion in 2016.


Expected Age of Retirement Now 66

On average, workers today expect to retire at an average age of 66–substantially higher than the expected retirement age of 60 in the mid-1990s, according to a Gallup survey. Here is how the percentage who expect to retire when they are 66 or older has grown over the years…

Percentage of workers who expect to retire at age 66 or older
2018: 41%
2015: 37%
2010: 34%
2005: 31%
2002: 21%
1995: 12%


Big Increase in Death by Falling

Older Americans are increasingly likely to die from a fall, the CDC reports. The annual number of people aged 65 or older who die because of falling climbed from 18,000 in 2007 to 30,000 in 2016. Even more telling, the death rate from falls grew steeply during those years–from 47 deaths per 100,000 people aged 65 or older in 2007 to 62 deaths per 100,000 in 2016, a 31 percent increase. The rise in the death rate from falls among older Americans is not a new phenomenon, according to the CDC. Between 2000 and 2006, the rate climbed 42 percent.

Why is falling a growing problem for older Americans? The increase in the 85-plus population may be one factor, says the CDC, since the death rate from falls is highest in the oldest age group. But even among the oldest old, the death rate from falls has surged–up 41 percent between 2007 and 2016. How to explain this? “Nationally, the rate of deaths from falls might be increasing because of longer survival after the onset of common diseases such as heart disease, cancer, and stroke,” the CDC speculates.

One possible factor behind the increase, not mentioned in the CDC report, is obesity. Older Americans are increasingly likely to be obese, and the obese may find it more difficult to maintain their balance as they age. Among men aged 75 or older, the prevalence of obesity grew from 18 to 27 percent between 1999-2002 and 2011-14, according to the National Center for Health Statistics. Among their female counterparts, obesity increased from 24 to 31 percent.

If the death rate from falls cannot be reduced, the CDC warns, many more older people will die from falls in the years ahead. “If the current rate remains stable,” it reports, “an estimated 43,000 U.S. residents aged ≥ 65 years will die because of a fall in 2030, and if the rate continues to increase, 59,000 fall-related deaths could result.”


Who Likes to Drive? 

One-third of Americans enjoy driving “a great deal,” according to a Gallup survey. Another 44 percent enjoy it moderately. That may be why the 52 percent majority of the public says it “never wants to use” a driverless car.

Do you personally enjoy driving?
A great deal: 34%
Moderately: 44%
Not much: 13%
Not at all: 8%

Men and women feel somewhat differently about driving. While 41 percent of men enjoy driving a great deal, only 27 percent of women feel the same way.

These are a sampling of posts published in the past few weeks in Cheryl Russell’s Demo Memo blog. Please send questions or comments to



Weight status of men and women aged 20 or older, 2011-14:

Normal weight: 26.0%
Overweight, not obese: 38.3%
Overweight, obese: 34.5%

Normal weight: 31.0%
Overweight, not obese: 28.5%
Overweight, obese: 38.5%


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Percent of high school boys who play computer games or use computers 3 or more hours per day on school days: 43%

Percent of high school boys who watch television 3 or more hours per day on school days: 24%