Civilian Noninstitutional Population
The Civilian Noninstitutional Population is defined as those age 16 and older not in an institution (e.g. prison, armed service, nursing homes) residing the the 50 states plus the District of Columbia.
Essentially, CNP is the working age population except that most people aged 16-22 are in high school or college, thus not working full time.
Birth Rate Per 1,000 Persons
16-Year Lag
The spikes and declines in the birth rate correlate to changes on the first chart with a 16-year lag.
The latest data for the above chart is as of April of 2019. In other words, birth rate data predates Covid.
The Pandemic Caused a Baby Bust, Not a Boom
Scientific American reports The Pandemic Caused a Baby Bust, Not a Boom
When the COVID pandemic led to widespread economic shutdowns and stay-at-home orders in the spring of 2020, many media outlets and pundits speculated this might lead to a baby boom. But it appears the opposite has happened: birth rates declined in many high-income countries amid the crisis, a new study shows.
Arnstein Aassve, a professor of social and political sciences at Bocconi University in Italy, and his colleagues looked at birth rates in 22 high-income countries, including the U.S., from 2016 through the beginning of 2021. They found that seven of these countries had statistically significant declines in birth rates in the final months of 2020 and first months of 2021, compared with the same period in previous years. Hungary, Italy, Spain and Portugal had some of the largest drops: reductions of 8.5, 9.1, 8.4 and 6.6 percent, respectively. The U.S. saw a decline of 3.8 percent, but this was not statistically significant—perhaps because the pandemic’s effects were more spread out in the country and because the study only had U.S. data through December 2020, Aassve says. The findings were published on Monday in the Proceedings of the National Academy of Sciences USA.
Birth rates fluctuate seasonally within a year, and many of the countries in the study had experienced falling rates for years before the pandemic. But the declines that began nine months after the World Health Organization declared a public health emergency on January 30, 2020, were even more stark. “We are very confident that the effect for those countries is real,” Aassve says. “Even though they might have had a bit of a mild downward trend [before], we’re pretty sure about the fact that there was an impact of the pandemic.”
Covid Accelerated the Existing Trend
Covid accelerated the already declining birth rates.
Given the 16-year lag between births and the civilian noninstitutional population coupled with the aging of the workforce there will be fewer and fewer workers supporting retired workers on Social Security.
Notice the relatively steep decline in the birth rate starting in 2008 and continuing through today.
That impact will start showing up in 2024 and last a minimum of 12 years.
How long depends on whether the birth rate picks up after Covid. I highly doubt the birth rate will pick up.
Deflationary and Inflationary Impacts
- Inflationary: Shortage of workers increases wage pressures
- Deflationary: Fewer workers support an increasing number of retirees
- Deflationary: Older workers need more assistance, buy fewer things, travel less.
- Deflationary: More government debt and deficits. Government spending has a negative impact on real GDP.
Regarding point one, please consider Dominos Reports There’s No One to Deliver the Pizzas, Plus Mish Anecdotes
However, the net impact of the four points is rather deflationary, not inflationary.
Point 3 relates to demand destruction that kicks in as people age. It accelerates at age 70 or so. Note that all baby boomers will be 65 or older by 2030. The vast majority of them will be retired, living off savings or Social Security (and good luck for the latter).
Lacy Hunt accurately discussed point 4 in Hoisington Management’s Third Quarter Review.
For discussion, please see Lacy Hunt Sticks With His Message: Lower Bond Yields On the Way
A Word About Fed Policy
For discussion of landlords, serfs, and tenants thanks to the Fed, please see Investors Rush to Buy Nearly 1 in 4 Homes
Thanks For Tuning In!
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Mish
How long until the 99% is forever priced out?
2. Japan has not been directly giving massive entitlements to its citizenry. They spend about half what the USA does on entitlements and those are largely health related, not free cash handed out to people like the USA does.
3. The USA is trying to simultaneously adopt the European model of social democracy and also adopt the Japanese model of government debt.
This is going to result in an absolute disaster.
The alternative isn’t pretty.
Yes, you and I have to finance our debt. How do we do that? With our incomes of course. State governments finance their debt with their incomes as well as municipal governments. The higher my income is, the easier it is for state and local governments to steal from me to pay their debts too.
The Federal reserve is highly sensitive to people’s personal economic situation…too sensitive in my opinion. I’d rather they were brutally insenstive to economic situations at all and just let market forces set interest rates and leave the government to sleep in its own bed.
Will they? No.
Therefore it is inflation, not deflation that will be considered to be the more acceptable way to fix it. Inflation still means we all pay, we just don’t notice it. Actually, those who do not own inflatable assets will pay. Those with inflatable assets (Stocks, real estate, art, etc) will do just fine. The bottom 90% always pay for government excesses, except during the French revolution when the nobility paid….but France never recovered from that.
If by deflation you and Mish mean that the inflated money will not buy as many goods as non-inflated money, then yes, I agree.A person is better off earning 10.00 an hour but paying 500 a month for rent vs. earnign 20 an hour and paying 2k a month for rent. He’s making more, but it doesn’t get him as many goods and services. His lifestyle is deflated.That is the outcome I believe will happen. The debt must be paid somehow, but it will be paid by inflation, the hidden tax.My opinion can change based on whether or not a robotics revolution occurs will can and possibly will create far more goods at a cheaper price than anyone thinks possible.That would be a win for everyone, only I’d expect the government to borrow even more becuase they could.
What you say used to be true when banks actually held on to loans. They no longer do. Fannie and Freddie own them all.
And that means the government.
now stand at $14.96 trillion. Balances are $812 billion higher than at the end of 2019 and $691 billion higher than 2020Q2”
A bit dated article but still true today
https://www.cnbc.com/select/revolving-credit-debt-lowest-since-the-great-recession/
It would absolutely crater US GDP. They’d never be able to tax that amount. It would kill every industry destroying the sources of revenue they’d need to exist to tax. 7% would be 2.1 trillion, just for INTEREST payments, not reduction of principle.
We aren’t even doing that now, we are adding to debt 2-3 trillion a year now. Just to break even we’d need to tax 2-3 trillion more. To pay it off you’d need to add another 2-3 trillion on top of that.
No, that’s not possible.
THey’d have to also remove 100% of all SS payments and all welfare.
That will never happen. Rates cannot and will not go back to 7% for decades, and even then, only if the US government doesn’t keep adding to the debt pile at least as fast as its inflated away.
That won’t happen for decades most likely.
There’s plenty of room to borrow and inflate away for years and years. We aren’t even close yet IMHO.
Who needs a family when you have tender and video games.