Two interesting demographic data points that bode well for the economy caught our attention last week.
First, households. Our point of view is that you can cut through all the noise about the state of the consumer by looking at household creation. The more households, the more spending.
This Census Bureau chart compares two household tracking tools — the Current Population Survey and the American Community Survey. While the data points diverge by about 150 basis points, the recent trends show that the percentage of American adults who head up households is rising. This is a precursor of overall household growth.
Households increasingly are headed by unmarrieds, a long term trend. The average age of a first marriage has increased by almost two years in the past decade. This has contributed to a decline to 19.6% of households that include married couples with children.
These unmarried households drive different aspects of the consumer economy than married households. Again, we believe this is a fairly simple trend: unmarrieds are larger consumers of the experience economy — trips, entertainment, restaurants — while marrieds are bigger consumers of the consumption economy — home sales, appliances, home improvement, child-related goods and services.