David Kelly, chief global strategist at JPMorgan Funds
The fact that millennials have fewer children than older generations is, according to a recent report, a serious challenge for the American economy.
By postponing marriage and having children, millennials set the economy for a potential slowdown in growth – especially in the home and car markets, said David Kelly, chief global strategist with JPMorgan Fundsand author of the report.
& # 39; Forming a new household or rebuilding a household is an engine for the economy & # 39 ;, he told DailyMail.com. & # 39; It forces people to make (financial) decisions that they might not otherwise make. And the fact that they don't make those decisions destroys energy from the economy. & # 39;
Kelly & # 39; s projects Gross domestic product is slowing to a pace of 2 percent growth later this year, compared to the current 3.2 percent year-on-year trend.
GDP is a measure of the value of all goods and services produced in a country – and is a value used by economists to gauge how robust the economy is at a given time.
The proportion of young Americans who own their own homes has fallen since the 1980s and 1990s, especially after the Great Recession of 2008. Source: Federal Reserve System Board of Directors
& # 39; There is already a delay in the creation & # 39 ;, Kelly said, noting that the number of babies born in America in 2018 – less than 3.8 million – was the lowest in 32 years.
& # 39; We have a problem with people & # 39 ;, Kelly said. & # 39; Unless we get more employees and more babies & # 39; s we don't get the supply and demand needed to generate GDP growth. & # 39;
The report notes that many millennials have substantial student loan loans, making it harder for them to pay for a home – or get a good mortgage rate if they decide to buy.
The median net worth in people aged 25-35 was $ 18,200 in 2016, compared to $ 31,273 in 1995, according to data from the Board of the Federal Reserve System.
The decline in wealth accumulation for that age group followed the Great Recession of 2008, when many millennials graduated from university, were looking for work or were expected to have a steady job with a steady job in the first years.
The setbacks of that era are still spooky for the generation, which has seen only a slow recovery of their profit potential and savings since that time.
Adding the burden is a growing national debt that ultimately needs to be addressed by the millennium generation – probably through cuts in social security and Medicare, or increased taxes.
The fertility rate for white women falls below the limit needed to maintain the population in every US state
The fertility rates for white women in the United States fell in 2017 – below the speed the population needed to replace themselves, reveals a new report from the Centers for Disease Control and Prevention (CDC).
However, the fertility rate among black and Latin American women increased in 12 and 29 states respectively.
When researchers looked at fertility rates for women of all age groups and races, they discovered that the national rate was 16 percent lower than what is considered the level for a population to replace itself.
Experts say that this is probably due to the fact that the large number of native Dutch women has fewer children than before, while the much smaller number of women born from immigration has more children.
Moreover, the American white population has been hit hard by the 2008 Great Recession and is aging.
Demographers and public policy experts say that if the rate continues to fall, there will not be enough healthy young workers to keep the economy going and replace the aging population.
Millennials are also the most diverse generation in American history, with around 44 percent identifying as a racial or ethnic minority – compared to 25 percent of individuals between 21-36 in 1985.
That could be a factor in their retirement, because minorities always accumulate less wealth than their white counterparts – even when comparing groups of similar ages, incomes, education, and marital status.
In general, investors are not prepared for the resulting economic shift, Kelly said.
& # 39; I think the problem is that investors are positioned to invest in companies that can only thrive in a fast-growing environment, & # 39; he said. & # 39; We must adapt to a world of slow growth and the companies that can adapt to slow growth must do better. & # 39;
& # 39; You need companies and ideas that are going to build new markets or gain market share quickly & # 39 ;, he added. & # 39; If the tide is not rising, you need a special type of boat. & # 39;
That means looking to invest outside the traditional cyclical sectors of the home and car markets – and keeping an eye on areas such as artificial intelligence that promise consistent, though slow, growth.
The biggest risk, Kelly said, ignores the fast-moving economic shift.
He warns that American politicians are short-sighted because they focus on so-called America-first issues.
& # 39; I think our political system is not really well positioned to deal with this, & # 39; he said. & # 39; I think we have old arguments about America & # 39; s position in the world and whether other countries are stealing our jobs or our wealth. I think that's not the point. If labor is scarce, we must ensure that labor is trained. & # 39;
& # 39; The United States needs a more international stance the moment they retire to a nationalist stance, & he added.
This graph illustrates the decline in the median net assets of young Americans from 2010. The decline in wealth accumulation for that age group followed the Great Recession of 2008. Source: Federal Reserve System Board of Directors
. (TagsToTranslate) Dailymail (t) news