The Kids Aren’t Alright: More Millennials Are Living with Their Parents
Pity the millennial, poster child of the Great Recession. A popular meme portrays the typical millennial as a basement-dwelling economic loser, forever condemned to live in the nether regions of his parent’s house. Unfortunately, that meme is not without basis. The recession seem to have hit millennials particularly hard, making it even more difficult for young people to find good jobs and to establish their own households.
In some respects, things are looking up for millennials. The U.S. job market is strengthening, making it easier to find work, and wages are starting to creep higher. The unemployment rate for young adults (ages 18 to 34, excluding full-time college students) has been heading lower since peaking near 12 percent in 2010; the latest unemployment reading for millennials is 7.7 percent.
However, there is one notable sticking point, and it echoes that basement-dwelling meme. Even though household formation rates have rebounded overall, millennials are still not moving out and establishing their own households like they used to. In fact, more millennials are living with parents or relatives than before the recession, according to new research from Pew.
In 2007, before the recession hit, 71 percent of millennials were living independently. In 2015, that number has fallen to 67 percent, with no sign of bottoming.
On the flip side, 22 percent of young adults were living in their parents’ homes in 2007. That number has risen to 26 percent this year.
The Pew report doesn’t look at why millennials are sticking so close to home. However, it does suggest that the relatively simple economic argument about the lack of good jobs no longer tells the whole story. Since the economy is recovering, however unevenly, there are likely other factors in play. One could be cultural: More young people simply enjoy living at home and are in no hurry to move out. Perhaps the U.S. is becoming more like Italy, where adult children often live at home until they marry.
That’s not to say that money plays no role in the trend, though. One big economic factor not addressed in the Pew report is pretty basic: rising rents. This graphic from Zillow makes it clear that rents have been soaring all over the country. More than $3,000 for a one bedroom in San Francisco? With those kind of numbers, living at home makes all the sense in the world.
It’s Official: No Government Shutdown – for Now
President Trump signed a short-term continuing resolution today to fund the federal government through Friday, December 22.
Bloomberg called the maneuver “a monumental piece of can kicking,” which is no doubt the case, but at least you’ll be able to visit your favorite national park over the weekend.
Here's to small victories!
Greenspan Has a Warning About the GOP Tax Plan
The Republican tax cuts won’t do much for economic growth, former Federal Reserve Chair Alan Greenspan told CNBC Wednesday, but they will damage the country’s fiscal situation while creating the threat of stagflation. "This is a terrible fiscal situation we've got ourselves into," Greenspan said. "The administration is doing tax cuts and a spending decrease, but he's doing them in the wrong order. What we need right now is to focus totally on reducing the debt."
The US Economy Hits a Sweet Spot
“The U.S. economy is running at its full potential for the first time in a decade, a new milestone for an expansion now in its ninth year,” The Wall Street Journal reports. But the milestone was reached, in part, because the Congressional Budget Office has, over the last 10 years, downgraded its estimate of the economy’s potential output. “Some economists think more slack remains in the job market than October’s 4.1% unemployment rate would suggest. Also, economic output is still well below its potential level based on estimates produced a decade ago by the CBO.”
The New York Times Drums Up Opposition to the Tax Bill
The New York Times editorial board took to Twitter Wednesday “to urge the Senate to reject a tax bill that hurts the middle class & the nation's fiscal health.”
Using the hashtag #thetaxbillshurts, the NYT Opinion account posted phone numbers for Sens. Susan Collins, Bob Corker, Jeff Flake, James Lankford, John McCain, Lisa Murkowski and Jerry Moran. It urged readers to call the senators and encourage them to oppose the bill.
In an editorial published Tuesday night, the Times wrote that “Republican senators have a choice. They can follow the will of their donors and vote to take money from the middle class and give it to the wealthiest people in the world. Or they can vote no, to protect the public and the financial health of the government.”
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Can Trump Succeed Where Mnuchin and Cohn Have Flopped?
President Trump met with members of the Senate Finance Committee Monday and is scheduled to attend Senate Republicans’ weekly policy lunch and make a personal push for the tax plan on Tuesday. Will he be a more effective salesman than surrogates in his administration?
Politico’s Annie Karni and Eliana Johnson report that both Democrats and Republicans say Mnuchin and chief economic adviser Gary Cohn have repeatedly botched their tax pitches, “in part due to their own backgrounds” as wealthy Goldman Sachs alums. “House Speaker Paul Ryan earlier this month asked the White House not to send Mnuchin to the Hill to talk with Republican lawmakers about the bill, according to two people familiar with the discussions — though Ryan has praised the Treasury secretary’s ability to improve the legislation itself,” Karni and Johnson write.