U.S. Population Is Growing at Slowest Pace Since World War II
(Bloomberg) -- America’s population is growing at the slowest rate since World War II, threatening to undermine demand and investment in the economy, according to a new blog post from the St. Louis Federal Reserve.
The data suggests that the population is on track to expand much more slowly than the Census Bureau envisaged in 2017, the last time it published long-term projections. Thta means a smaller labor force and less demand for business equipment, housing and other capital goods, according to William Emmons, an economist at the St. Louis Fed. The decline in investment demand may help to keep interest rates low, he wrote.
Birth and death rates along with immigration all impact population growth. U.S. births reached a peak of about 4.32 million in 2007, then declined to 3.75 million by 2019.
The figures suggest the U.S. may be following in the footsteps of other advanced economies.
In 2006, Austrian demographer Wolfgang Lutz warned that European nations were at risk of falling into a “fertility trap” in which there are fewer women alive to have babies, leading to slower economic growth which further depressed the birthrate. At that time, American women had a fertility rate of 2.1 children -- called the “replacement rate” -- compared with 1.5 for the European Union. The U.S. rate has since fallen below 1.7.
Meanwhile, U.S. deaths have been on the rise as the population grows and ages -- and Covid-19 accelerated the trend. Research also suggests that drug overdoses picked up during the pandemic.
International migration hasn’t been strong enough to offset rising deaths and declining births. At about a million new immigrants a year, the rate has changed little since 2005 and is projected to stay that way until 2060.
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