America’s aging population is one reason consumer spending has remained robust even as the Federal Reserve has raised interest rates, The Wall Street Journal (subscription) reports.
What’s going on: As of August, a record 17.7% of the U.S. population was 65 or older.
- Senior citizens, whose finances tend to be relatively robust, “accounted for 22% of spending last year, the highest share since records began in 1972 and up from 15% in 2010,” according to Labor Department data cited by the Journal.
Why it’s important: “Our large share of older consumers provides a consumption base in times like today when job growth slows, interest rates rise and student-debt loan repayments begin again,” Susan Sterne, chief economist at Economic Analysis Associates, told the news outlet.
Longer lives, more spending: In addition to living longer, the elderly are more active than ever before, spending on traveling, hiking, cruises, e-bikes and more.
- “The average household led by someone age 65 and older spent 2.7% more last year than in 2021, adjusted for inflation, according to the Labor Department, compared with 0.7% for under-65 households.”
Recession buffer: Baby boomers have amassed more than $77 trillion in wealth, according to the Fed—and some economists say that money will help prevent an economic recession.