Financial Stability More Important than Mobility

Americans far prefer financial stability to financial mobility, according to Pew Charitable Trusts' Survey of American Family Finances...

Which is more important to you—financial stability or moving up the income ladder?
Moving up: 8%
Financial stability: 92%

Source: The Pew Charitable Trusts, Survey of American Family Finances

Have We Turned a Corner?

The Great Recession officially ended in June 2009, but a number of vital socioeconomic indicators—such as household income, household spending, births, and homeownership—continued to decline. Until now. The latest data suggest we may have turned a corner...

Is median household income making a comeback? Median household income in 2014 was still below the median of 2007, after adjusting for inflation. But in November 2015, median household income finally surpassed the December 2007 median, according to monthly household income estimates by Sentier Research.

Is household spending growing? Average household spending peaked in 2006, according to the Consumer Expenditure Survey. Then the Great Recession hit, and spending fell 9 percent between 2006 and 2013, after adjusting for inflation. But spending grew 3 percent between 2013 and 2014, and many categories in long-term decline began to grow—including apparel, food away from home, alcoholic beverages, and household furnishings.

Is the baby bust over? The number of births in the United States climbed 1 percent between 2013 and 2014, according to the National Center for Health Statistics—the first increase since 2007. Even more important, the fertility rate—the number of births per 1,000 women aged 15 to 44 inched up from the all-time low of 62.5 in 2013 to 62.9 in 2014.

Are Millennials buying? The homeownership rate of householders aged 30 to 34 climbed to 46.8 percent in the third quarter of 2015, according to the Census Bureau. This was 1.6 percentage points higher than the all-time low of 45.2 recorded in the second quarter of 2015.

As new data emerge over the next few months, we'll find out whether we have indeed turned a corner or hit another dead end. Stay tuned.

Graduation Rates Vary by Type of College

Only 39 percent of students who start as full-time, first-time bachelor's degree seekers finish their degree in the allotted four years, according to the National Center for Education Statistics. The 59 percent majority completes the degree in six years, however. But the figure varies greatly by type of school...

Finished bachelor's degree in four years
Total institutions: 39.1%
Public institutions: 32.9%
Private, nonprofit: 52.9%
Private, for-profit: 23.4%

Finished bachelor's degree in six years
Total institutions: 59.2%
Public institutions: 57.2%
Private, nonprofit: 65.5%
Private, for-profit: 31.4%

Finished bachelor's degree in eight years
Total institutions: 61.6%
Public institutions: 60.3%
Private, nonprofit: 66.6%
Private, for-profit: 32.6%

Source: National Center for Education Statistics, Graduation Rates for Selected Cohorts, 2006-11; Student Financial Aid, Academic Year 2013-15; and Admissions in Postsecondary Institutions, Fall 2014, First Look (Provisional Data)

Feelings of Financial Security Depend on Day of Month

Americans are more likely to feel financially secure on the first day of the month than on the last day of the month, according to Barriers to Saving and Policy Opportunities—the third in a series of three issue briefs from Pew Charitable Trusts' Survey of American Family Finances.

This curious day-of-the-month finding makes sense when you know the context in which most Americans live: 55 percent of households spend all or more their income most months, and 60 percent experience at least one financial shock in a 12-month time period. Little wonder, then, that as a month progresses a substantial share of households discover they don't have enough money to make ends meet.

On the first day of the month, 52 percent of Americans feel financially secure. On the last day of the month, only 34 percent feel secure. "The data show that, for many respondents, perceptions of well-being are driven more by their financial conditions at the moment than by the longer-term outlook," concludes the report. These short-term shifts in opinion are crucial to policy and program participation and effectiveness."

Source: Pew Charitable Trusts, Barriers to Saving and Policy Opportunities

Straight or Gay? New Data on Sexual Orientation from the National Survey of Family Growth

It's not easy to collect data on sexual orientation, sexual attraction, or sexual experience. Many Americans are understandably hesitant to reveal details about their personal lives to government interviewers. But ask respondents to put on headphones, listen to a series of questions, and enter answers directly into a laptop computer (a method knows as "audio computer-assisted self-interviewing," or ACASI) and data begin to emerge. The National Survey of Family Growth used ACASI when it surveyed the nation's 18-to-44-year-olds about their sexuality. Here are the results...

• Sexual attraction: 4% of men and 6% of women say they are attracted equally to both sexes, mostly or only to the same sex, or refused to answer.
• Sexual orientation: 5% of men and 8% of women identify themselves as gay, lesbian, bisexual, or refuse to answer.
• Same-sex sexual contact: 6% of men and 17% of women say they have had same-sex sexual contact.

Why are women so much more likely than men to report same-sex sexual contact? Most likely because men and women are asked different questions. Women are asked whether they have ever given or received oral sex from another female. If they answer no, then they are asked whether they have ever had any sexual experience of any kind with another female, boosting the figure to 17 percent. Men are asked whether they have ever given or received oral or anal sex from another male. They are not asked the additional question about sexual experience of any kind. Thus, the smaller 6 percent.

Source: National Center for Health Statistics, Sexual Behavior, Sexual Attraction, and Sexual Orientation Among Adults Aged 18-44 in the United States: Data from the 2011-2013 National Survey of Family Growth

26% Had Problems Paying Medical Bills

More than one in four Americans aged 18 to 64 say they or someone in their household had problems paying medical bills in the past 12 months, according to a Kaiser Family Foundation/New York Times survey. Here's who ran into trouble...

Percent of 18-to-64-year-olds with problems paying medical bills in past 12 months
Total with problems: 26%
With health insurance: 20%
Without health insurance: 53%

It's not hard to figure out why those without health insurance would have trouble paying their medical bills. But what caused trouble for those with health insurance? Three things, according to the survey's findings. Among the 20 percent of 18-to-64-year-olds with health insurance who had problems paying their medical bills...

• 75% could not afford their insurance plan's co-pays, deductibles, or coinsurance.
• 32% received care from an out-of-network provider, and their insurance did not cover the full cost of care. Most were surprised by the out-of-network bill, with 69 percent of those who received a surprise bill unaware that a provider was not in their plan's network. 
• 26% said their insurance claim was denied.

Source: The Burden of Medical Debt: Results from the Kaiser Family Foundation/New York Times Medical Bills Survey

Men's Earnings, 1979 to 2014

The median weekly earnings of men who work full-time stood at $871 in 2014—about 2 percent lower than the $888 of 1979, after adjusting for inflation. But this small decline in the median masks the different fortunes of men at the top and bottom of the income scale...

Usual weekly earnings of highest-paid 10 percent of men who work full-time
2014: $2,094
1979: $1,565
Percent change: +34%

Usual weekly earnings of lowest-paid 10 percent of men who work full-time
2014: $395
1979: $447
Percent change: -12%

Source: Bureau of Labor Statistics, A Look at Pay at the Top, the Bottom, and In Between

Most Middle-Aged and Older Americans Are Being Treated for Chronic Health Conditions

Old age is not for sissies, and chronic conditions are one of the reasons. Among 18-to-44-year-olds, most are free of health problems. Only 20 percent of adults under age 45 are being treated for a chronic health condition. In middle age, troubles become commonplace. Fully 56 percent of 45-to-64-year-olds are being treated for at least one chronic condition. Among people aged 65 or older, the figure rises to 85 percent.

In every age group, Hispanics are less likely than non-Hispanic Whites or Blacks to be receiving treatment for chronic health conditions. The biggest gap is in middle age. Only 49 percent of Hispanics aged 45 to 64 are being treated for a chronic health condition. This compares with 57 percent of non-Hispanic Whites and 62 percent of non-Hispanic Blacks. Many Hispanics lack health insurance, and they see health care providers less frequently than non-Hispanic Whites or Blacks. Is that why fewer are being treated for chronic conditions? Perhaps. But Hispanics also live longer, so it's likely they're simply healthier.

Source: Medical Expenditure Panel Survey, Health Expenditures for Adults by Number of Treated Chronic Conditions, Race/Ethnicity, and Age, 2012

Who's Not Working?

More than 87 million Americans aged 16 or older did not work in 2014, nor did they look for work—17 million more than in 2004. Nonworkers grew from 31 to 35 percent of the adult population during those years. What's behind the increase? A big factor is the baby-boom generation, which is inflating the number of retirees. The Bureau of Labor Statistics calls this the "age effect." Here are the four types of nonworking adults...

• The number of adults not in the labor force because they are retired climbed from 31 million to 39 million between 2004 and 2014. Most are aged 65 or older.
• The number of adults not in the labor force because they are ill or disabled climbed from 12  million to 16 million between 2004 and 2014. Most are aged 55 or older, but a substantial 45 percent are aged 25 to 54.
• The number of adults not in the labor force because they are in school climbed from 11 million to 16 million between 2004 and 2014. Most are aged 16 to 24. 
• The number of adults not in the labor force because they are caring for home and family was 13.5 million in 2014, the same as in 2004. Two out of three are women aged 25 to 54.

Source: Bureau of Labor Statistics, People Who Are Not In the Labor Force: Why Aren't They Working?

Births to Unmarried Women by State, 2014

Among the nearly 4 million babies born in 2014, a substantial 40.2 percent were born to unmarried women. The percentage of babies born out-of-wedlock varies greatly by state, with the majority born out of wedlock in three states and the District of Columbia...

States with the highest percentage of births out of wedlock
Mississippi: 54.0%
Louisiana: 52.7%
New Mexico: 51.3%
District of Columbia: 50.2%

States with the lowest percentage of births out of wedlock
Utah: 18.6%
Colorado: 22.4%
Idaho: 27.8%
Washington: 32.1%

Source: National Center for Health Statistics, Births: Final Data for 2014, Supplemental Tables

Average Age at First Birth, 2014

The average age of American women giving birth for the first time climbed to a record high of 26.3 in 2014—nearly four years greater than in 1980. Behind the rise in age at first birth is the increase in college attendance. The percentage of female high school graduates who enroll in college within 12 months of graduation climbed from half in 1980 to more than two-thirds today.

Average age at first birth
2014: 26.3
2010: 25.2
2007: 25.0
2000: 24.9
1990: 24.2
1980: 22.7

Source: National Center for Health Statistics, Births: Final Data for 2014, Supplemental Tables

Household Income Stable in November 2015

Median household income in November 2015 stood at $56,746, according to Sentier Research—not significantly different from the October median, after adjusting for inflation. The November 2015 median was 4.8 percent higher than the November 2014 median and 9.4 percent above the $51,875 median of August 2011, the low point in Sentier's household income series. 

"Even though median annual household income did not increase significantly in November 2015, we continue to see an upward trend in income that has been evident since the low point in August 2011," says Sentier's Gordon Green. "We have now recaptured all of the income losses that have occurred since the beginning of the last recession in December 2007." Sentier's median household income estimates are derived from the Census Bureau's monthly Current Population Survey. 

Median household income in November 2015 was 1.9 percent higher than the median of June 2009, the end of the Great Recession. It has now surpassed (by $32) the median of December 2007, the start of the Great Recession. It was still 1.1 percent below the median of January 2000. The Household Income Index for November 2015 was 98.9 (January 2000 = 100.0).

Source: Sentier Research, Household Income Trends: November 2015

State Migration, 2010 to 2015

Americans aren't moving as much as they once did, but those who move are having a big impact on some state populations. Twenty-one states and the District of Columbia gained more domestic migrants than they lost between 2010 and 2015, while 29 states lost more than they gained. Here are the five states with the highest and lowest rates of net domestic migration during the past five years...

Highest rates of net domestic migration
1. North Dakota
2. District of Columbia
3. Colorado
4. Florida
5. South Carolina

Lowest rates of net domestic migration (losses)
1. New York
2. Illinois
3. Alaska
4. New Jersey
5. Connecticut

Source: Census Bureau, State Totals: Vintage 2015

Child Care Costs Up 70%

Among families with employed mothers who pay for child care, the average weekly cost has grown from $84 in 1985 to $143 in 2011, after adjusting for inflation—a 70 percent increase. For families with preschoolers, the average weekly cost of child care in 2011 was an even higher $179. The steep and rising cost of child care explains why so many families with preschoolers depend on grandparents. Fully 21 percent of families with preschoolers and a working mother relied on a grandparent as the primary child care provider in 2011, up from 16 percent in 1985.

Source: Census Bureau, Who's Minding the Kids? Child Care Arrangements: Spring 2011

Uptick in the Tchotchke Index

The Tchotchke Index ticked up in 2014, with average household spending on gift shop items, home decor trinkets, and yard sale finds rising to $111. The rise in the index is a positive economic indicator. The more we're willing to spend on tchotchkes, the greater our economic well-being. Demo Memo Blog created the Tchotchke Index several years ago to track consumer confidence (here is the original post). It's the amount of money spent by the average household on "decorative items for the home," a category in the Consumer Expenditure Survey.

The Tchotchke index remains well below its peak. In 2000, the average household spent $263 (in 2014 dollars) on decorative items for the home. Spending plunged during the recession of the early 2000s, struggled to reach $236 in 2005, then plummeted during the Great Recession. The index hit an all-time low of $104 in 2013...

Tchotchke Index (in 2014 dollars)
2014: $111
2013: $104
2012: $131
2011: $123
2010: $110
2009: $142
2008: $139
2007: $177
2006: $166
2005: $236
2004: $208
2003: $168
2002: $198
2001: $202
2000: $263

Source: Demo Memo analysis of the Consumer Expenditure Survey

State Population Change, 2010 to 2015

Between 2010 and 2015, the U.S. population as a whole grew 3.9 percent to 321 million. By state, growth ranged from a high of 12.2 percent in North Dakota to a small loss in one state—West Virginia's population fell 0.5 percent during those years.

Fastest growing states, 2010 to 2015

1. North Dakota, 12.2%

2. District of Columbia, 11.1%

3. Texas, 8.8%

4. Colorado, 8.1%

5. Utah, 7.9%

6. Florida, 7.5%

7. Nevada, 6.9%

8. Arizona, 6.6%

9. Washington, 6.3%

10. South Carolina, 5.6%

Source: Census Bureau, State Totals: Vintage 2015

Is There Hope for Homeownership?

Even if the homeownership rate of 25-to-34-year-olds remains in the doldrums, the number of young-adult homeowners is likely to rise in the next few years, according to a Fannie Mae analysis. With the number of 25-to-34-year-olds in the population projected to expand by about 500,000 a year for the rest of the decade, a stable homeownership rate should result in growing numbers of homeowners in the age group.

The homeownership rate of households headed by 25-to-34-year-olds plunged from 46.7 percent in 2006 to just 36.9 percent in 2014, according to the Census Bureau's American Community Survey. The number of homeowners in the age group fell by 1.8 million during those years. If the homeownership rate has hit bottom and remains there, then the number of homeowners in the age group will rise by 74,000 a year. That's a big reversal from the average annual loss of 231,000 homeowners aged 25 to 34 since 2006.

Whether the homeownership rate of 25-to-34-year-olds will stabilize is a big if, however. The Fannie Mae report notes that if the homeownership rate of the age group continues to fall at the same rate of decline as occurred from 2012 to 2014, then the number of homeowners aged 25 to 34 will shrink by 113,000 a year on average from now until 2020.

Source: Fannie Mae, Housing Insights, Could the Long Decline in Young-Adult Homeownership Be Nearing An End?

Trouble With the Redesigned CPS

Not everyone is happy with the redesigned Current Population Survey. An Employee Benefit Research Institute report questions some of the new numbers emerging from the redesign.

First, some background. The Census Bureau redesigned the Current Population Survey's income questions to better capture retirement income. The new income questions were presented to a split CPS sample in 2014 (collecting data for 2013) and to the full sample in 2015 (collecting data for 2014). The new questions successfully captured more retirement income, long known to be underreported. But anomalies are emerging in other CPS data. In particular, EBRI is troubled by a drop in retirement plan participation. Among full-time workers aged 21 to 64 in 2013, the percentage who participated in a retirement plan was only 49.5 percent based on the new questions versus 53.0 percent based on the old questions. In 2014 (when the entire CPS panel was asked the new questions), participation fell to 46.6 percent. The redesigned CPS is not only showing lower participation, says EBRI, but also declining participation—a larger decline than ever recorded in CPS data going back to 1987.

What really bugs EBRI is this: the biggest decline is occurring in the segment most likely to participate in a retirement plan—full-time workers aged 21 to 64 with earnings of $75,000 or more. The 2013 new questions found their participation to be 63.4 percent versus 68.6 percent with the old questions. In 2014, their participation declined to 61.1 percent. These declines are questionable, says EBRI, because other surveys show rising retirement plan participation.

"While the redesign of the CPS questionnaire achieved one of its primary goals of capturing more income—especially pension income—it appears to have had a serious impact on the results of other variables within the survey," EBRI researcher Craig Copeland concludes. In the future, he says, researchers may have to turn to alternative sources—such as the National Compensation Survey—to accurately track retirement plan participation.

Source: Employee Benefit Research Institute, The Effect of the Current Population Survey Redesign on Retirement-Plan Participation Estimates

Who Thinks They're A Great Parent?

Among parents with children under age 18, most say they're doing a "very good job" as a parent, according to a Pew Research Center survey. Millennial mothers are most likely to give themselves a big pat on the back—57 percent say they're doing very well, thank you. A smaller 48 percent of Gen Xers feel that way. Among Boomers, the figure is just 41 percent.

There's a reason for these generational differences. Among parents with children under age 18, Millennials are most likely to have only preschoolers at home—an age group that generates feelings of smug satisfaction. Boomers are most likely to have teens under their roof—an age group that generates feelings of despair. Pew's survey examines this very phenomenon. Among parents whose oldest child is under age 6, the 52 percent majority say they're doing a very good job. Among those with teens at home, only 42 percent feel so certain.

Source: Pew Research Center, Parenting in America

College Does Not Protect Wealth of Blacks, Hispanics

College graduates weather economic downturns better than those with less education. That's the assumption, but is it true? Only for Asians and non-Hispanic Whites, according to a study by the Federal Reserve Bank of St. Louis. Take a look at the inflation adjusted 2007-to-2013 trend in median net worth by educational attainment of householder for each race and Hispanic origin group...

Asian households
With bachelor's degree: +5%
Without bachelor's degree: -65%

Non-Hispanic White households
With bachelor's degree: -16%
Without bachelor's degree: -33%

Black households
With bachelor's degree: -60%
Without bachelor's degree: -37%

Hispanic households
With bachelor's degree: -72%
Without bachelor's degree: -41%

For Asians and non-Hispanic Whites, a college degree offered some protection during the Great Recession. For Blacks and Hispanics, a college degree meant greater losses. As disturbing as this finding is, it gets worse. The same pattern can be found over the longer term—from 1992 to 2013. Asian and non-Hispanic White households headed by college graduates saw their median net worth grow by more than 80 percent during those years, after adjusting for inflation, while their less-educated counterparts experienced a decline. But Black and Hispanic households headed by college graduates saw their median net worth shrink between 1992 and 2013. For Hispanic college graduates, net worth fell 27 percent during those years versus a 31 percent increase in the net worth of their less-educated counterparts. For Black college graduates, net worth fell 56 percent between 1992 and 2013 while Blacks without a college degree experienced a smaller 4 percent loss.

"College degrees alone do not provide short-term wealth protection, nor do they guarantee long-term wealth accumulation," conclude the researchers. "The underlying factors causing racial and ethnic wealth disparities undoubtedly are complex and deeply rooted. Further research is needed."

Source: Federal Reserve Bank of St. Louis, Center for Household Financial Stability, Why Didn't Higher Education Protect Hispanic and Black Wealth?