Monday, July 27, 2009Boomer Factoids
From a Business Week article "The Incredible Shrinking Boomer Economy" (from a McKinsey study):
The rising savings rates in the boomer population will drain $400 billion out of consumer spending for the foreseeable future.
The boomer's were such an integral part of the spending culture that the group (79 million) accounted for 47% of national spending before the credit and real estate bubble burst, yet was responsible for just 7% of national savings.
The boomers were responsible for 78% of the spending growth in the economy from 1995 to 2005.
The peak year for spending in the boomer community was 54; whereas for the generation ahead of them (a thriftier bunch), the peak year was 47.
The share of boomers aged 54 to 63 who say they are "financially unprepared for retirement" comes to 69%.
Add to the above that interest rates and minimum payments on credit cards have risen and you can see that the life is being sucked out of one of the major drivers of consumerism. And it has been consumer that has driven the U.S. economy in the past.
As I have been saying for a while in MSIA parlance, it is going to get "interesting." This weekend I will do a longer post on why this all shouldn't matter to us.