Is Boomer money quietly fueling the consumer economy?
A noted Wall Street guru says much consumer spending is being driven by Baby Boomer parents handing over Money to their Gen Z and millennial children.
As reported here, Meredith Whitney, CEO of Meredith Whitney Advisory Group and one-time “Oracle of Wall Street” (for predicting the Great Financial Crisis), says that “”American Express data shows Gen Z and Millennials are spending at a rate that’s five times more than the rate for boomers.”
She says “they have the wherewithal to spend on things like French-press coffee, Instagrammable leisure experiences, online gaming and sports betting as well as yes, avocado toast,”
OK, but where are they getting the money?
You guessed it — from the Boomers.
The article quotes Whitney: “The generation aged between 24 and 38 represents 20% of the US population and has the most discretionary spending power of any other age cohort. They have and continue to benefit from a different type of subsidy: their parents.”
The chief form that subsidy takes, is that the younger generation are still living with their parents “at record levels.” In fact, nearly 20% of men and almost 12% of women aged 24-35 are living at home with their parents, so they don’t have to spend their money on shelter-related costs like insurance, property tax or utilities.
“As long as these trends continue, this age cohort will remain the key driver of discretionary spending in the US,” Whitney goes on to say. “It’s no wonder why there is so much debate over the real state of the US Economy.”
This is an important and often-overlooked phenomenon in the economy, and we’ve reported on its previously here. You’d think it would diminish some of the anti-Boomer ageism and the alarming diatribes against Boomer greed, but no such luck. All we can do is keep pointing out the facts, and they are very impressive.
