Posted on 02/15/2023 2:51:07 AM PST by EBH
Despite inflation and recession fears, Americans have continued spending over the past year, keeping businesses open and people employed. Even now, as the money many people saved during the pandemic dries up, spending is still going strong. But the commitment by U.S. consumers to buy, and then buy some more, is a double-edged sword. While it’s keeping the economy humming, it could also lead to inflation and high prices for years to come.
Part of what’s behind the expected buying boom and “sticky” inflation is demographics. Nearly 100 million Americans are at an age when they tend to spend big, according to Bill Smead, chief investment officer at investment firm Smead Capital Management.
“We have 92 million people between 22 and 42, and they’re all going to spend their money on necessities the next 10 years, whether the stock markets are good or bad,” Smead said in an interview Tuesday with CNBC.
With all the big purchases such as homes over the next decade, the economy will continue to run hot, making the Fed’s long-term goal of reducing inflation much harder to achieve, Smead said.
Millennials, who surpassed baby boomers as the largest age group in the U.S. in 2020, will likely make up most of the spending as they age into homebuying. The number of Americans aged 18 to 44 and responsible for the most spending is forecasted to grow by almost 5% between 2020 and 2030, according to the Census Bureau, which is good news for the economy, but not so much for reducing inflation.
“We think the inflation is going to be far stickier and longer lasting,” Smead said, referring to high prices becoming hard to bring down past a certain level.
(Excerpt) Read more at msn.com ...
Because of money printing.
Inflation, especially at the time horizons the article is looking at, is a monetary phenomenon. Younger people entering prime spending years has nothing to do with the systematic inflation rate.
Its the old people with power that have done this. X and GZ have no clue. But it looks like they may get one across the forehead.
Fortune mag is a joke.
“Too many dollars chasing too few goods” = inflation.
Gee they like to eat.
More shameless propaganda keeping fools attention away from The Fed and Biden.
Blame dumblecrat spending in the trillions..not some millenial schmuck’s video game purchase.
A large number of youngsters won’t/ can’t buy a house; won’t/ don’t own cars. Those are 2 biggies in a person’s financial life.
No. Don’t blame the youngsters for govt over spending
Exactly, setting this up as a conflict between generations.
Couple this with recent article recommending the mass suicide of senior citizens and you can see where this is all going.
“It’s certainly not Joe’s fault.”
Depends. They certainly voted for it.
Beat me to it. Never ceases to trouble me how fundamentally ignorant people in the media are about this basic fact of economics. Expansion of money supply above and beyond increases in productivity is inflation. Everything else is just consequences.
Did they...?
There is too much loaf money being burn’t.
Go out in the hours when most everyone use to be working and notice it.
Starting up strong by 10 at the biskitville drive thru.
Nor were they the ones who sent our manufacturing, technology, money, and tax paying jobs to the communists in China.
All have something to do with the inflation we have now.
If anyone should apologize, it's the older generations for the country we left them with.
Spendthrift consumers cannot cause inflation, period. The author is a dumbass.
Moving Manufacturing back to the USA will cost money. But, it will produce good permanent jobs.
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