Low U.S. Birth Rate May Prolong Housing Slump

[marmar]

(Bloomberg) Frances Janisch had a daughter five years ago. Now she and her husband may not have a second child because income from their photography business in New York City is erratic.

“I always imagined I would have two, so it bothers me that I don’t,” said Janisch, 41, who grew up with a large extended family in South Africa. “It has everything to do with economics.”

Similar decisions to postpone or forgo having babies may delay the recovery from the five-year U.S. housing slump and restrain future consumer spending on goods and services from child care to diapers, soaps and toothpaste. Expenditures associated with one child for a middle-income family are $226,920 over 17 years, with housing the biggest expense, the U.S. Department of Agriculture estimated in June.

The number of births fell to an estimated 4 million last year, the fewest since 1999, according to National Center for Health Statistics data. American families -- whose finances have been hurt by high unemployment, falling home prices and low pay raises -- lack confidence to plan for “explosions in spending” required by a new child, says Peter Francese, a demographic- trends analyst in Exeter, New Hampshire, for the MetLife Mature Market Institute. U.S. births may not recover until 2013, he predicts. .......(more)

The complete piece is at: http://www.bloomberg.com/news/2011-11-21/births-at-11-year-low-may-extend-u-s-housing-slump-amid-consumer-cutbacks.html#

[SheilaT]

1. The Great Depression and then WWII depressed

birth rates so much in this country that demographers saw our population seriously declining. As we all know, the baby boom happened and totally reversed that trend.

Postponing children, or not having them at all is a completely rational response to hard times. Whether or not there will be a new baby boom twenty years down the road remains to be seen.

I also have always found those projected costs for child-raising to be suspicious. I think they may include assumptions of foregone wages on the part of the wife/mother, which is misleading. Plus, I know we did not spend anywhere near that amount on our two sons over the years.

[bengalherder]

2. If there are no jobs for projected offspring (or their parents)

how are they going to be buying houses, or even soap, down the road?