Quick Note On Demographics

One of my reasons for medium- and longer-term optimism is the favorably demographic situation in the U.S. For years, we have been sinking into the demographic hole left behind as the Baby Boomers retired. The situation is now changing:

Traditionally, peak earning years begin in the early- to mid-40s. Beginning now, we are climbing the demographic hill where each succession year a larger population enters its prime earning years. For comparison, this is pretty much the same type of hill we were climbing in the 1990s when the Baby Boomers were aging into their peak earning years:

The earliest Baby Boomers were turning 45 in 1991. I have tended to think the aging of the Boomers into their peak earning years was an under-appreciated aspect of that era that was overshadowed by the dot com boom. To be sure, the Boomers represented a bigger jump in the peak earnings population, so I don’t expect the current demographic transition to pack the same punch. The trend, however, is very similar and I anticipate will be supportive of growth over the next several years.