NY Times: As New Graduates Return to Nest, Economy Also Feels the Pain

[marmar]

By CATHERINE RAMPELL
Published: November 16, 2011


Like most of her friends, Hollis Romanelli graduated from college last May and promptly moved back in with her parents.

As a result, she didn’t pay rent — or a broker’s fee or renters’ insurance, for that matter. She also didn’t buy a bed, desk, couch, doormat, mop or new crockery set. Nor did she pay the cable company to send a worker to set up her TV and Internet, or a handyman to hang a newly framed diploma. She didn’t even buy drinks and snacks for a housewarming party.

In other words, Ms. Romanelli, 22, saved a lot of money. But she deprived the economy of a lot of potential activity, too.



Every year, young adults leave the nest, couples divorce, foreigners immigrate and roommates separate, all helping drive economic growth when they furnish and refurbish their new homes. Under normal circumstances, each time a household is formed it adds about $145,000 to output that year as the spending ripples through the economy, estimates Mark Zandi, chief economist at Moody’s Analytics. .............(more)

The complete piece is at: http://www.nytimes.com/2011/11/17/business/economy/as-graduates-move-back-home-economy-feels-the-pain.html?_r=1&hp

[Lucinda]

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