• bear graphic bull graphic

    LAST CALL! HEDGEYE’S CYBER MONDAY
    SPECIAL EVENT

    OUR BEST DEAL ALL YEAR JUST GOT BETTER

    LIMITED-TIME OFFER... THEN IT DISAPPEARS

Below is a complimentary Demography Unplugged research note written on 1/27/21 by Hedgeye Demography analyst Neil Howe. Click here to learn more and subscribe.

U.S. Population Growth Slows Almost To A Halt - storkish cartoon 09.09.2016

According to Census preliminary estimates, the U.S. population only grew by +0.35% from 2019 to 2020. This marks the fifth consecutive year of slowing growth, with declining births, stagnant immigration, and population aging all playing a role. (Federal Reserve Bank of St. Louis)

NH: The falling YoY trend is no surprise.

Demographers have been forecasting these declines for years--thanks to a negative shift in everything affecting population growth: rising mortality, dropping fertility, and dropping net immigration. But IMO it's even worse than it looks. This 2020 growth number will be downwardly revised for sure.

And let's prepare for a much bigger negative downdraft in 2021.

The St. Louis Fed is basing its estimates on preliminary data releases from the official decennial census that was conducted over the past year. (Conducting the census was a mess due to the pandemic, but that's another story.) Every ten years, the completeness and accuracy of this survey enables Census to update all of the annual estimates it has made over the prior decade. That's what it's doing here.

Result of this updating: Nearly all of the last ten years' annual growth numbers have been revised slightly downward. In 2019, for example, the +0.50% estimate was revised downward to +0.46%. And the first-ever estimate for 2020 falls still lower, to +0.35%. The following image below draws on an excellent presentation by Bill Frey at Brookings.

U.S. Population Growth Slows Almost To A Halt - nh1

A few explanations are in order. First, as is the Census' custom, these YoY growth rates go from midyear to midyear (July 1). Second, no it's not true that U.S. population growth suddenly dipped way down in 1917 to 1918 (when the official growth rate actually goes slightly negative). That's an artifact of President Woodrow Wilson shipping just over one percent of the U.S. population to France that year. Census did not start adjusting for overseas military personnel until 1940.

Here's the bottom line: Until a few years ago, the all-time low for U.S. YoY population growth was +0.59% in 1933.

That was, as we all know, one of the worst economic years ever. According to these new estimates, we've been falling beneath that prior low ever since 2018. That's the same year, incidentally, that the U.S. total fertility rate (TFR) hit its all-time low. (See "U.S. Fertility Passes Another (Ominous) Milestone.")

While Census has not yet released components of growth for 2020, we can get a good guess at what is happening by looking at those components through 2019. 

U.S. Population Growth Slows Almost To A Halt - nh3

We can surmise the story in 2020. Deaths, already rising due to population aging, ticked higher--boosted by Covid-19. Net immigration ticked further down due to the recession and to lockdown immigration controls. And births ticked further down as well. The result was more decline.

And I strongly suspect that this decline was underestimated, and that population on July 1, 2020 will be revised down further, when the full brunt of the pandemic is properly assessed.

Looking ahead, we can anticipate that most of the damage due to the pandemic will register in the Census number for 2021 (again, calculated at midyear). This will include the vast majority of the likely deaths, most of the immigration fall, and, starting in 1H 2021, much of the expected dropoff in births.

Let's assume, for example, that excess deaths in 2020 (mostly related to Covid-19) continue at their current rate of about 600K per year. That would alter YoY population growth by roughly -0.18%. Further, let's assume that births drop 10% in this year. (Very plausible: See "The Baby Bust of 2020.") That would alter it by another -0.11%. That adds up to -0.29%.

A decline of this magnitude would come perilously close to taking us all the way to zero in 2021. Recall that we were only at +0.35 in 2020. What's more, we haven't figured in further downward revisions in 2020 nor any expected reduction in immigration.

Next year looks to be a historic year for U.S. demographics. But not in a good way. 

*  *  *

ABOUT NEIL HOWE

Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.

A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.

Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."

Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.

Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.

Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.