This week’s Barron highlighted the demographic surge that is slowly winding its way through our economy.  The Millennial generation, also known as generation Y, is people who were born between 1976 and 1995.  They represent 27 percent of the population counting 86 million people strong.  The number is so large because it includes immigrants as well as children born in the US.   The Baby Boomer generation now numbers about 80.3 million people and represents 25% of the population.  So Generation Y, now outnumbers the Baby Boomers by about 7%.   Their effect on the economy may not be as large as the Baby Boomers, but its effect will still be noticeable and can only be ignored at your wealth’s expense.

All of the data related to this group and how they are affecting the economy points towards an economic boom that may not be quite as large as the 1980s and 1990s but will echo it.  Just as the Baby Boomers reached the age en masse to form households in the early 1980s, which helped lead the US out of a major decade of stagnation, the Millennial generation may play the same role for the next two decades.  In research, there seems to be a correlation between large numbers of families entering the house formation stage (getting married, buying houses and having children).  The article describes that 2015 appears to be the tipping point where the number of households reaching that stage overwhelms the younger group.

In the past when this happened we experienced prolonged booms in housing and the stock market similar to the 1980s and 1990s.  The Millennials are the most highly educated generation, the vast majority appears to be securing good paying jobs (despite the media) and the generation seems more intent on saving than the Baby Boomers did.  All of these signs present positive signs for the economy and country as a whole!