The Weekly Update 5/23/2025™
Patience Required
Back in the early 1980’s the generation of people we refer to as the 78 million “Baby Boomers” started to hit the peak of their spending years, roughly age 50-55. The Economy expanded rather quickly from the demand for, well, everything from this largest generation ever in America.
In the first chart below, my friend Mike Williams over at Truvestments reminded me that we just welcomed the next generation, behind the now larger cohort than the baby boomers (the Millennial generation at 88 million) and Gen Z at 80 million people strong.
The end of 2024 marked the 20-year span of births which will place nearly half of the U.S. population right in our Sign #1, Personal Consumption Expenditures (PCE), sweet spot. Our Country has never had two generations back-to-back at over 80 million each!
Recall that PCE is 67.8% of our entire economy, (source: JP Morgan Guide to the Markets 3-31-2025). It would be reasonable to assume that the demand from these two cohorts, for about everything will be about 2x what we experienced in the 1980’s from the Baby Boomers.
It is a fair observation to conclude that our U.S. economic expansion is solid and expanding. Historically, an expanding and growing economy will drag the values of Corporate America up with it.
Some people may choose to ignore this very real built-in personal consumption demand part of the economy, but that seems like a bad idea when history has proven very clearly this demand for everything is predictable, measurable and unstoppable.
Do to their one child policy from decades ago, China has the exact opposite problem. The kids weren’t born due to the policy and for that simple reason, demand for products and services will be flat to down as will be their economy in general for decades going forward.
These two cohorts of over 80 million people each are not only a 1980’s do-over, but a do-over squared! It is an investor’s gift that will keep giving over the next few decades. Don’t pooh-pooh it.
I did not say market valuations go straight up, and I did not say without volatility, yet the data flow suggests the good old USA has a very bright outlook. Think “Five Year Money” (Read it Here)..
I’m interested in your thoughts, comments and observations. Feel welcome to call, email, or stop by the office and say Hi.
Respectfully,
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional
*The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. Investing involves risk. Loss, including loss of principal, may occur. No strategy assures success or protects against loss. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly
Copyright © 2025. The Wealth Strategies Group. All rights reserved.