What we’re blaming millennials for this week: saving too much
Posted On October 10, 2019
They’re entitled, we said. Self-absorbed. The products of participation trophy culture.
But now millennials are frugal?
Citing research from Raymond James, cnbc.com noted that millennials might be to blame for slower economic growth. Raymond James analyst Travis McCourt cited the rise of the U.S. personal savings rate — 8.1 percent this August, as compared to 5.7 percent in 1996 – as having a “disinflationary impact” on the economy, stagnating growth.
McCourt chalks this up to a “generational change” after the financial crisis of the previous decade. And so now, we’re apparently blaming millennials for saving too much.
Perhaps if college wasn’t so expensive, and student debt so pervasive, millennials wouldn’t have to save so much (one in four Americans currently have student loan debt, according to nitrocollege.com, and the average amount is just over $37,000). Perhaps if home ownership were more within reach. Perhaps if they felt secure enough to get married, they might splurge a little and get the economy moving.
Or maybe it’s that few of us feel particularly secure right now. And what happens when we don’t feel particularly secure? We start stuffing dollar bills under the mattress.
Increased savings isn’t just a domestic trend, however. The personal savings rate is up around the globe, according to CNBC, affecting global markets – particularly high savings rates in China, which has a disproportionate effect on markets due to the size and growth of its economy.
Do the Chinese have student loan debt too?
While we’d all like to see the economy keep growing until it explodes like Mr. Creosote, savings isn’t necessarily a bad thing. Because ultimately, money saved will turn into money spent. It’ll just be spent on things like homes, and college tuition for children, and healthcare, and retirement. And of course, it won’t be spent right now, which is what economic forecasters are typically concerned with.
Since, as of last year, the average American had less than $100,000 in retirement savings, maybe these tight-fisted millennials are onto something.