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.
“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.