Earlier today we hosted a call breaking down preliminary NVSS data, which shows that the U.S. general fertility rate dropped again in Q3 2016. Coming off of a rough 2015 for births, many demographers anticipated a rebound—which now appears unlikely.
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HIGHLIGHTS
- Shifting age gradient: U.S. first-time mothers are getting older. Birthrates are falling among the under-30 age brackets that historically have accounted for the most births—and are rising among the 30+.
- No economy-fueled baby boom: Many forecasters expected rising median household income in 2015 to translate into higher fertility. This hasn’t happened. Real PCE and birthrates, which historically have moved in conjunction, have recently shown a divergence.
- Tempo effect or something else? Optimistic forecasters believe that declining birthrates are a symptom of Millennials simply “putting off” childbirth until later in life, at which point they’ll start having babies. But new Millennial lifestyle habits, combined with declining family size expectations, shed doubt on that assumption.
- Why Millennials are different: What are these new lifestyle habits? Declining risk-taking behavior (which leads to lower rates of unplanned pregnancy) and a rise in urban living both drag down fertility.
- The immigration effect: Immigration has been declining from high-fertility regions (like Latin America) and has been rising from low-fertility regions (like Asia). We expect these shifting immigration patterns to continue to be a long-term headwind for U.S. fertility.
