The kids aren’t alright – Economic health of Gen Z

Unemployment is rising and wage growth is declining for young adults, which could have a long-term scarring impact. Weak labor market prospects and rising housing costs are causing more young adults to live with their parents.

• The choice to not move out reduces spending on housing, transportation, and food.
• We estimate that the cumulative impact is a 12bn annual drag on consumption.
• An outsize wealth effect will continue to prop up spending by high-income consumers, but combined with depressed sentiment, it may prompt younger adults to be more cautious with their dollars.
• Young workers are more vulnerable to economic downturns, and a weak labor market can have a lasting negative impact on wage growth and earning potential.