US Births Decline, Economy Faces Demographic Headwinds

Women are delaying childbearing, with birth rates increasing for those 30 and older but sharply declining for younger women. Factors include greater reproductive control, later marriage, and concerns about climate change, the economy, and healthcare quality.

Samuel Tombs, chief US economist at Pantheon Macroeconomics, states this slowdown will be a medium-term drag on economic growth, contributing to a projected slowdown from 2.5% to under 2%. Additionally, reduced immigration, dropping population growth from 1% in 2023 and 2024 to 0.3% in 2025, exacerbates workforce growth challenges.

The declining birth rate also worsens Social Security's long-range deficit projection, with trustees now expecting the total fertility rate to reach 1.9 children per woman by 2050, a decade later than previously estimated. The cohort born in the 1990s, currently in their late 20s and early 30s, will be crucial to watch, as models suggest they would need an unprecedented birth rate in their late 30s and 40s to "catch up."