by Mish

Instead, the rate dropped into a tie with the lowest birth rate on record.

This is yet another surprise for economists to ponder.

Please consider the Wall Street Journal report Behind the Ongoing U.S. Baby Bust.

The newest official tally  from the National Center for Health Statistics showed an unexpected drop in the number of babies born in the U.S. in 2015. The report was a surprise: Demographers had generally expected the number of births to rise in 2015, as it had in 2014. Instead, the U.S. appears to still be stuck in something of an ongoing “baby bust” that started with the recession and housing collapse and has yet to reverse.

Baby Bust by Race

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Baby Bust by Age

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The Wall Street Journal concludes “There’s still good reason to believe the birth rate will pick up in coming years. After slumping for nearly a decade into the 1970s, births picked up in the 1980s and 1990s (giving us the generation known as millennials.) The most common age in America is 24 or 25, meaning there’s a very large cohort of these millennials who are about to hit the years that people are most likely to become parents.”

No Mystery

I fail to see why any economist should be surprised by this. A record number of millennials are living at home.

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This is simply too obvious. So I have two questions:

  1. Do economists read anything or do they just believe in their models?
  2. If they do read, how come they cannot grasp simple, easy to understand ideas?

Economists who could not figure any of this out now place their faith in the fact “a very large cohort of these millennials who are about to hit the years that people are most likely to become parents.

Mish’s Alternate View

Unless the millennials

  1. Shed student debt
  2. Move out on their own
  3. Get a job that supports raising a family
  4. No longer have to take care of their aging parents
  5. Have a significant change in attitudes about homes, families, debt, and mobility ….

economists will still be wondering “what happened” years from now.

Mike “Mish” Shedlock

Baby Bust Continues: Births Lowest in 32 Years as Fertility Rate Hits Record Low

The number of babies born in the US has declined in 10 of the last 11 years as the fertility rate slumps.

Import Prices Unexpectedly Drop 0.6%, Most in 18 Months: Export Prices Drop 0.1%

Import prices fell 0.6%. Economists expected a 0.1% decline. Export prices fell 0.1%. Economists expected a 0.2% rise.

Greenspan Predicts Housing Bust

On May 21st Greenspan all but assured a housing collapse was coming with his statement Stable prices replacing boom

Existing Home Sales Unexpectedly Decline 1.7 Percent: Fourth Drop in Five Months

The Econoday consensus expected a small increase in existing home sales in August.

New Home Sales Plunge to Lowest Annualized Pace in Three Years

New home sales plunged to a seasonally-adjusted annualized rate (SAAR) of 571,000.

Lunch Traffic Lowest in Four Decades.

A pair of articles on the Wall Street Journal ponders an event I long expected would happen: willingness to eat at fast food places where food is steeply priced and of dubious quality.

Pending Home Sales Unexpectedly Dive to Lowest Level in 3.5 Years

Those who thought weakness in home sales was a temporary soft patch appear to have things wrong.

US Output Drops at Fastest Rate in a Decade

The US in caught in an enormous economic downturn that will be the worst in history.

China Seeks Baby Boom Ponzi Scheme

China now encourages childbearing to keep the economy humming and to stave off a demographic decline. Will a new baby boom do the trick?