The US birth rate tanked in 2009, according to data released by the National Center for Health Statistics. Previous research by Robert Prechter has shown that the advance/decline ratio of the NYSE is an amazingly accurate leading indicator of babies to come in the next year. Why the next year? Well, you know what related process typically has a 9-month lag…
Source: Robert Prechter
The NCHS reports:
The fertility rate among women 15-to-44 years old fell from a high of 69.2 per 1,000 in 2007 to 68.4 in 2008, and fell again in 2009 to 66.8. Overall births declined to 4,136,000 in 2009, a fall of 111,000 over 2008. With the cost of raising children costing approximately $221,000 from birth to age 17, delaying or foregoing a child(ren) is a logical consequence of the downturn in economic times.
Of course, 2007 was a banner year for babies:
In 2007 with the boom in the economy, the number of births broke a 50-year record high set during the Baby Boom era, but the last two years recessionary effects have impacted the birth rate.
Though of course it wasn’t quite the 2007 economy, which was in the process of rolling over, but the 2006 credit bubble peak that you can thank for the banner year in baby making!
The early 1930’s Great Depression era was also a drought for babies, as was the sideways stock market (in nominal terms) of the early-mid 1970’s.
Looking into my crystal ball, I’m predicting a bounce back year for babies in 2010 – likely buoyed by the mega-rally in the major stock indices.
And for more on the investing implications of demographic trends, be sure to check out our exclusive interview with demographic and economic forecaster Harry Dent.