The Population Problem

According to recently reported data for the year ended June 30, 2022, the US population is continuing a recent trend of slow growth, with an increase of just 0.4%, or 1.3 million, only marginally better than 2021’s 0.1% gain.  Key factors include 245,000 more births than deaths and approximately 1.0 million net immigrants.

Economic growth depends, in part, on population (workforce) growth.  If the birth rate is not going to contribute to workforce growth, that leaves persuading Americans to work longer, immigration, and productivity.  We have previously discussed these issues in our blogs of August 31, 2022, “Good Paying American Jobs,” and August 10, 2022, “Robots, Cobots, and Productivity.”

Investors should seek to assess the implications of workforce driven lower growth and slower GDP gains.  The current chaos at our southern border is not constructive.  The US is not alone in seeking workforce gains.  The UK, having substantially removed itself from the EU, is not able to find enough workers.  As a result, for example, there have been cuts in services, including health care and reduced hours at many restaurants.

On a more positive note, Labor Department data for November showed a significant increase in US restaurant employment.  It is important to note that employment trends can be quite fluid.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA