While baby boomers are worried about the economic end times, their youthful counterparts in their 20’s and 30’s are feeling better about this. And while that phenomenon is not uncommon – the enthusiasm gap between generations has been particularly notable in recent years.
According to The Wall Street Journal, index after index is showing a similar result – among younger consumers, confidence is back at pre-recession levels, while for older consumers (55 and up), optimism has not returned and has actually taken a beating this year numbers-wise.
Which explains the strange spending picture emerging in early 2016 – older consumers ramping down their spending and younger buyers ramping it up.
But younger consumers are somewhat less good at, well, consuming – they tend to carry high debt loads via student loans, combined with comparatively low incomes. The median net worth for families under 35 was a mere 6 percent of the median net worth for 55- to 64-year-olds as of 2013, according to the Federal Reserve.
It’s “a little bit more confident consumer, but also a less wealthy consumer,” said Marshal Cohen, chief retail analyst at research firm NPD Group.
And thus the millennial ramp up is not quite enough to balance the boomer slow down – spending in the U.S. grew only 1.5 percent in Q1, the smallest increase in 2 years and 1/3 the pace from 2014 according to the Commerce Department.
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“While younger people have more disposable income, the seniors probably have the toughest time of anybody right now,” one business owner told the Journal – noting that the increasing minimum wage and inexpensive gas had driven more younger customers her way – but that older customers living on fixed incomes were becoming less frequent.
