Source: Fortune
Summary
The US economy relies heavily on the spending and wealth of baby boomers, who are driving the economy and preventing a recession. According to economists, the wealthiest generation in history, people aged 55 and over, own 73% of the nation’s entire wealth and are the ones doing the “bulk of spending”. However, this reliance on a small cohort of spenders is rising, and the economy’s vulnerability to an asset price correction is increasing. The labor market is also affected, with the healthcare sector accounting for the vast majority of new job openings, which are largely driven by the growing needs of an aging population.
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The strategy enters a familiar phase.
Economists like Mark Zandi and David Doyle are highlighting the reliance on wealthy consumers, particularly baby boomers, to drive the economy. The numbers tell a story of a top-heavy spending distribution, with the top 20% of earners accounting for 59% of all consumer spending. The healthcare sector is also feeling the effects, with a growing need for labor to care for an aging population. However, the economy’s vulnerability to an asset price correction and inflation is increasing, and the labor market is facing a “corrosion” of growth due to an aging population.
Boomers are driving the train, but the tracks are getting shaky.
Author: Evan Null
