Millennials earn far less than baby boomers at the same stage of life, according to a new analysis of Federal Reserve data by Young Invincibles.
Hey advertisers! Take a break from fixating on Millennials and check this out: Baby Boomers and their elders are making up an outsize share of consumer spending.
The trend has significant implications not only for the biggest brands that are missing out on a lucrative audience but for an economy that continues to trudge along at a modest pace. It’s helping fuel a shift in household spending from retail goods to services, spurring more job growth but weaker worker output. And it’s contributing to the woes of retailers, such as Macy’s and Sears, that are closing hundreds of stores. The Commerce Department said Friday that retail sales unexpectedly fell in June.
“The 50-plus and 60-plus population is clearly playing a large role in consumer spending and older consumers are going to become more significant as these trends intensify,” says Wayne Best, chief economist of Visa.
In the first quarter, Americans 55 and older accounted for 41.6% of consumer spending, up from 41.2% late last year and 33.5% in early 2007, according to government and Moody’s data. Toss in 53- and 54-year-olds, and the Boomer- and-older set comprise about half of all consumption, according to Visa and Moody’s Analytics. In other words, they’re spending somewhat less than they did when they were…