Gen Z and Y: Poised for Growth, but Aging Population Could Drag Spending

Struggling brands and retailers who are betting on Millennials and Generation Z as a panacea for sluggish sales may want to rethink their approach. A recent report from Morgan Stanley said the spending of these generational cohorts “will accelerate over the next 10 years, but is likely not enough to offset the continued headwind from an aging population and rising health-care costs in the near term.” As a result, the research analysts urged investors to be “selective” with the funds. They also expect a deceleration in apparel spending over the next decade. Still, the combined spending power of Generations Z and Y is massive. Morgan Stanley researchers said that, over the next decade, “the 73 million Millennials [Generation Y] will overtake in number the Baby Boomers — who decline to 72 million.” “But in 2034, Gen Z, born between 1997 and 2012, which make up nearly 20 percent of the U.S. population, will become the biggest U.S. cohort, eventually peaking at 78 million,” authors of the report noted. “Total consumption growth, the largest component of GDP, should accelerate from here as Millennials and Gen Z age into their prime working and spending years and Baby Boomers become a smaller percentage of the working

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