Research Briefing | May 22, 2024

Demographics and incomes to drive US metro spending growth

Consumer spending growth is set to remain robust across the US. With real incomes continuing to rise, spending growth is forecast to average 2.4% this year, which represents a growth premium from the 2023 outturn of 2.2%. Nationally, the labor market remains strong, while strong household balance sheets have helped keep the saving rate low. Real incomes will continue to rise as inflation eases back.

What you will learn:

  • Metros in the Pacific, South, and Southwest & Mountains will see the fastest spending growth. Driven by a favorable industry mix and strong demographics, we forecast metros such as Austin, San Jose, and Houston to achieve the strongest growth. East coast and Midwest metros fall at the bottom of our rankings.
  • Demographic changes will shape long-term consumer spending. Metros with the strongest population growth will see the highest increase in consumer spending. Migration to successful city economies from young people, and to retirement towns from seniors, will boost local spending.
  • On top of migration, the US population is also aging. The sharpest population increase in most cities will come from the 65+ cohort. Meanwhile, we expect that one in four metros will face depopulation by 2050. We also forecast this demographic shift to increase spending on health.
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