Recessionary Reverberations: US Population Growth Lowest Since 1940s

Life before the Baby Boomers? There are probably a lot of people for whom that image holds all the promise of a shimmering mirage. Assuming, of course, they think living without TV, computers, air conditioning and Starbucks would be fun. But we digress.

Census data show that the reversal of population growth is tied directly to the financial crisis and subsequent recession. Not only do individuals postpone marriage and family creation, but immigration declines as would-be foreign workers hold off thanks to the lack of new jobs. The immigration situation is exacerbated by new restrictions which further discourage potential applicants.

The population decline creates a not-so-virtuous circle for a consumer-driven economy in which the number of new consumers plateaus or decreases so that economic revival is further slowed by the demographic changes it caused - ad nauseum.

Internal migration trends within the US are also becoming evident. Many Sun Belt states like Nevada and Arizona are experiencing reversals of their earlier population gains. Meanwhile, some northern manufacturing hubs like Michigan are actually stabilizing as those who wanted - or were able - to move have done so. This will eventually have political ramifications as states which gained population - and new Congressional districts - may lose them at the next census if current trends hold.

The history of US population growth is a testament to the power of cyclicality. The question is whether the current political stalemate ends, permitting the sort of economic policy-making that encourages renewed growth. JL

Haya al Nasser and Paul Overberg report in USA Today:

The recession may be officially over, but its impact continues to reverberate as the nation experiences its most sluggish population growth since the 1940s. The U.S. population grew 0.7% to 311.6 million in the year that ended July 1, even slower than at the height of the recession when the population grew 0.9%, according to new Census estimates.

"The nation's overall growth rate is now at its lowest point since before the Baby Boom,'' Census Bureau Director Robert Groves said.
Many Sun Belt states that were hit hard by the housing collapse have not regained their footing — except for Florida, which is showing glimmers of a recovery.

The state is gaining more people from other states than losing for the first time since the mid-2000s. The state grew 1.2% to 19.1 million.

"Florida is growing as much as it had in 2005-06,'' said William Frey, a demographer at the Brookings Institution.

Texas, now with a population of 25.7 million, had the largest gains, but its growth rate slowed to 1.7%.

Nevada had its lowest growth ever — 0.7% to 2.7 million. Arizona, another highflier before the economic downturn, grew only 1.1% to 6.5 million, a big decline from its annual growth of 3.3% before the recession.

"They have the lowest in-migration they've seen," Frey said. The state gained a net 7,000 people from other states, a huge drop from the 133,000 it netted from 2005 to 2006.

Even states such as North Carolina, which had maintained a steady growth even during bad times, are experiencing drops in new migrants. The state gained a net 32,000 people from other states, the lowest increase in the past decade.

"The pain is being felt, and it's actually expanding to more parts," Frey said. "The latest Census numbers tell us more of the same."

Michigan is losing fewer people and its growth is almost flat, largely because people who wanted to leave have already left, he says.