The latest consumer sentiment indicator suggests a gloomier assessment of the economy, although it remains strong. However, another indicator may contradict this weak reading.
According to a study, more Americans are planning to have a child next year. Bank of America Survey, a possible sign that there is at least enough optimism for the future to bring more life into this world.
In a research note Wednesday, BofA said the share of respondents who said they or their partner are expecting/intend to have/adopt a baby in the next 12 months rose to 12.4% in June from 11.5% in May. The latest figure is the highest since February 2023 and also a significant increase from less than 8% in February of this year.
The increase in June is also not necessarily seasonal. The BofA survey shows that this month’s reading was higher than that for June 2023 and June 2021, but lower than that for June 2022.
And as expectations for larger households rise, this could also fuel the desire for a new home.
The proportion of respondents who said they plan to buy a home in the next twelve months was 24.0% in June, roughly unchanged from the May figure of 24.3%, but represents a significant increase from the figures below 20% in the second half of 2023 and the first half of 2024.
This is despite the fact that mortgage interest rates rose sharply at the beginning of the year, when signs of sustained inflation dampened hopes of imminent interest rate cuts by the US Federal Reserve.
Meanwhile, the University of Michigan’s consumer sentiment indicator fell to its lowest level in seven months, plunging to 65.6 in June from 69.1 in May, defying forecasts for an improvement to 72.
Of course, the expressed intentions to have a child differ from actual birth rateswhich have been declining for years and reached a record low of 1.62 births per woman in the USA last year. More and more members of Generation Z are reporting that they plan to have only one child while sperm count has been declining for decades, which some call a global “Spermpocalypse.”
Other industrialized countries are experiencing similar developments that could put a strain on their growth potential. The low birth rate has so worried governments in East Asia that they more financial incentiveswhich, however, have so far had little effect.
The decline also alarmed Tesla CEO Elon Musk, who famously describes the world’s rapidly declining birth rate as “one of the greatest risks to civilization.”
“So many people, including smart ones, think there are too many people in the world and that the population is getting out of control. The opposite is true,” he said in 2021. “Please look at the numbers – if people don’t have more children, civilization will collapse, mark my words.”