Maybe it’s not just the economy?
Job creation may have picked up, but the Census Bureau reported today that the fraction of young adults between the ages of 25 and 34 living with their parents increased last year, reaching 17.7 percent for men and 11.7 percent for women. The figures fell for 18-to-24-year-olds, but since the census counts college students who live in dorms as “living at home” most years, it’s harder to interpret exactly what those figures mean. Point being, the labor market is getting better, but older millennials are still moving in with Mom and Dad.
Here’s the glass-half-full perspective: At some point, these twenty- and thirtysomethings are going to start climbing back out of the basement. And when they do, it will be a boost to the economy. Right now, the U.S. household formation rate (essentially the pace at which people, typically young adults, are moving out on their own) is incredibly low. When it speeds up, you’ll see more demand for housing, and the things that come along with it, like appliances, furniture, televisions, and so forth. So, you know, just think of this graph as increasing potential.