Editor's Note: Below are a couple interesting excerpts from a recent institutional research note written by our Demography analyst Neil Howe. To access Neil Howe's research research email firstname.lastname@example.org.
Nearly three-quarters (68%) of Millennial homeowners report feeling buyer’s remorse. The biggest sources of regret are financial (overspending on the down payment and underestimating living expenses), but FOMO also factors in for this risk-averse generation. (Bank of the West)
Neil Howe: The survey shows that Millennials are as likely as older generations to believe in the American Dream and almost as likely to say that "owning a home" is part of that dream. (They are also more likely than Boomers to include "having children" as part of the dream and more likely than all older generations to include "marriage" as part of the dream.) So why the post-purchase regret? Apparently, affordability is pushing many Millennial buyers to borrow from or cash out their retirement savings in order to make the down payment--or to buy fixer-uppers that require more work and/or skills to fix up than they initially imagined. Either way, they worry they did not make the right choice.
Pew Research Center reports that Xers are the only generation to have regained the net worth lost during the Great Recession. Because this analysis tracks generations rather than age brackets, it misses the point that the median net worth of a typical 35- to 54-year-old today is barely half of what it was in 2007. (Pew Research Center)
Neil Howe: Agreed: This Pew analyst concludes on a perversely complacent note. By any phase-of-life reckoning, young adults in their 30s (Xers, by Pew's definition, ranged in age from 27 to 42 in 2007) should have been looking forward to the steepest upward trajectory in wealth accumulation of their lives. Real median net worth typically doubles between age 30 and 40 or between age 40 and 50. Instead, after nine years, these Xers are simply getting back to the starting line. This bottom line should not be accompanied by celebratory fanfare. Gen X remains in deep trouble.
A new study quashes the theory that U.S. productivity growth appears slow simply because we’re not measuring it correctly. In reality, the amount of “stealth productivity growth” unaccounted for in the official statistics was actually higher 20 years ago than it is today. (The Wall Street Journal)
Neil Howe: For several years, I have been defending the finding of the vast majority of economists and national accounts statisticians--that productivity growth has fallen sharply since 2005--against some Silicon Valley and VC types who keep telling me it's just not so. So I thank Greg Ip, imo the WSJ's best economics journalist, for elegantly summarizing one more large Brookings study confirming the "decline" consensus. For the wonks among you, please peruse the full study at your leisure. Provocatively, the author says that the decline may indeed be even greater than the official data show. Yes, there are price, quality, and indexing conventions that have, over time, given the deflator a slight upward bias and thus have given output and productivity a slight downward bias. But, the author argues, this bias is almost certainly less today than it was in the 1990s before a variety of improvements (many inspired by the 1996 Boskin Commission) were implemented.