Home/Blog/Trading Ideas/We’re Having Fewer Kids – Another New Normal?

We’re Having Fewer Kids – Another New Normal?

31 July 2012 in Trading Ideas

Difficult economic conditions in the US during the past few years have had a huge impact recently on one of life’s most important decisions: whether or not to have kids.

A growing tendency for families seems to be a wait-and-see approach, as America’s birthrate has dropped to its lowest point in 25 years.

What’s more, as the USA Today recently reported, the fertility rate isn’t expected to rebound for at least two years – and could affect birth rates for years to come, according to Demographic Intelligence, a Charlottesville, Va.- based company that project quarterly birth forecasts.

The company said that the average births per woman has fallen from a high of 2.12 in 2007 and is expected to hit 1.87 births this year – and 1.86 births next year, the lowest level since 1987.

Marketers track fertility trends closely because of their obvious effect on sales sales of thousands of products from diapers, cribs and minivans to baby bottles, toys and children’s pain relievers, the USA Today said.

The sluggish economy, which has included stagnating wage growth and an elevated jobless rate, has clearly been a significant factor. Demographic Intelligence said the less-educated and Hispanics have experienced the biggest birthrate decline, while the share of US births to college-educated, non-Hispanic whites and Asian Americans has grown.

The effect of this economic slump on birthrates has been more rapid and long-lasting than any downturn since the Great Depression, the USA Today reported.

“Usually consumer sentiment bounces back a little quicker,” said Sam Sturgeon, president of Demographic Intelligence. “People are a bit in a wait-and-see pattern … There’s a sense of hesitancy, of ‘What does better look like? How will we know?’ — especially for those of prime child-bearing age …The key word would be uncertainty, a lot of uncertainty.”