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Having babies and economic recovery

It seems like everyone I know is expecting or trying to get pregnant.

But births are at a 11-year low. And these individual decisions are having far-reaching consequences, according to Bloomberg Businessweek.

Similar decisions to postpone or forgo having babies may delay the recovery from the five-year U.S. housing slump and restrain future consumer spending on goods and services from child care to diapers, soaps and toothpaste. Expenditures associated with one child for a middle-income family are $226,920 over 17 years, with housing the biggest expense, the U.S. Department of Agriculture estimated in June.

The number of births fell to an estimated 4 million last year, the fewest since 1999, according to National Center for Health Statistics data. American families -- whose finances have been hurt by high unemployment, falling home prices and low pay raises -- lack confidence to plan for “explosions in spending” required by a new child, says Peter Francese, a demographic- trends analyst in Exeter, New Hampshire, for the MetLife Mature Market Institute. U.S. births may not recover until 2013, he predicts.

Bloomberg Businessweek also cites concern from manufacturers of diapers and other baby/kid products on the impact of low births on sales.

This is a classic chicken-or-the-egg dilemma. Families will have more kids when the economy improves, but the economy is not recovering as quickly because households are making belt-tightening decisions such as delaying parenthood.

Are you holding off having kids until your financial situation or the economy gets better?

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