Population Growth Is Slowing. Why That’s a Problem for the U.S. Economy

This commentary was issued recently by money managers, research firms, and market newsletter writers and has been edited by Barron’s.

Dec. 29: The U.S. population increased 0.4% in 2020, to 329 million, marking the lowest growth rate since at least 1900. With a falling birth rate and an aging population, overall growth has slowed over the past five years. In fact, 2020’s projection will likely close out the slowest decade of population growth in the nation’s history. Stalling population growth could have major implications for potential economic output in the longer term. While these estimates precede and are collected independently from the 2020 decennial census, they provide useful insight into national and regional population trends.

Sixteen states saw growth pick up over the year, and 34 states are growing. Residents continued to flock to the West (+0.5%) and the South (+0.8%), which saw the largest gain of the Census regions. The South added just over 976,000 residents in 2020, with Texas (+1.3%), South Carolina (+1.2%), and Florida (+1.1%) posting the fastest increases and each ranking among the top 10 fastest-growing states. In the West, Idaho (+2.1%), Arizona (1.8%), Nevada (+1.5%), and Utah (1.5%) contributed nearly three-quarters of the region’s 354,000 population gain and saw the healthiest growth rates in the country. An affordability migration away from high-cost urban centers is helping fuel population growth in these regions.

—Mark Vitner, Charles Dougherty, Nicole Cervi

Previewing December Jobs Data

Commentary & Analysis

Maria Fiorini Ramirez


Dec. 28: Friday, Jan. 8, delivers the December employment report, along with November wholesale inventories and November consumer credit. The jobs data are tougher than usual to predict, with complicating factors including sizeable holiday-related seasonal adjustment that may distort outcomes, as patterns are anything but normal at the moment. Other tough-to-assess factors include the degree of pandemic-related softness in the service sector, and the speed at which underlying gains are slowing as the initial post-lockdown bounce fades.

With those caveats in mind, expectations concerning December nonfarm payrolls are widely scattered (the overall range is currently -175K to +200K), with very early medians of roughly +60K for the total and +75K for private payrolls. The unemployment rate is seen remaining near the previous 6.7%, the average workweek is generally expected to remain at 34.8 hours, and the median forecast for average hourly earnings is for a 0.2% month-to-month gains.

—Joshua Shapiro

Investors, Beware Complacency

Weekly Technical Review

Macro Tides


Dec. 28: Investors truly believe that markets are a discounting mechanism and that the stock market is now telling them that 2021 is going to be a good year for the economy. This conclusion is easy to reach if one believes vaccinations will proceed without a hiccup and herd immunity will be achieved by mid-2021. But the majority of investors are wrong at important turning points, which is why the majority of investors are bullish as the market peaks and bearish when it bottoms. Measures of investment sentiment show that investors are currently wildly bullish, so the risk is that they are too complacent about the near-term risk of a Perfect Covid-19 Storm and how smoothly the vaccines will be distributed in coming months. If this assessment is accurate, the stock market could be vulnerable to a quick, sharp correction, as investors are confronted with a less rosy perspective. If the stock market experiences a correction in January, Treasury yields will fall as bond prices rise. Gold, silver, and gold stocks will decline and the dollar will bounce.

—Jim Welsh

Personal Savings Rate Soars

Telemus Special Market Commentary



Dec. 28: The Federal Reserve Bank of New York compiled a useful analysis in October, examining what happened with the first round of stimulus payments that were issued this past spring. In summarizing their analysis, roughly one-third was saved, one-third was spent, and one-third was used to pay down debt. The New York Fed also surveyed where further rounds of direct payments might be allocated. Respondents indicated that a greater percentage, roughly 45%, of any future stimulus would be saved. Since the pandemic began, the personal savings rate has accelerated. Prior to 2020, Americans had been saving between 7% and 8% of their income. The savings rate spiked to 33.7% in April, and while trending down, remains elevated at 13.6% as of October. We expect a meaningful portion of the latest round of direct payments to be saved, further strengthening the financial position of the average consumer.

—Matt Dmytryszyn

Georgia (Election) on Our Mind

Cumberland Advisors Market Commentary

Cumberland Advisors


Dec. 28: As we enter 2021, we are very focused on the Jan. 5 Senate runoffs in Georgia. A Democratic victory in both races puts that party in control of both houses of Congress, along with a new Democratic administration led by President-elect Biden. Our view is that this outcome would lead to more spending—in greater amounts and on a faster pace than if the Republicans hold the Senate, which they can do with a Republican outcome in either race. We think bond market participants will start to discount increased spending, and perhaps a higher inflation rate, and that may cause yields to rise. We believe this will happen even with a Republican Senate, although at a slower pace. President-elect Biden still has good relationships with senators who were in office when he was a senator more than 12 years ago, and those relationships should foster some measure of greater cooperation. We think we’ll see rates back to where they were at the end of last year; but certainly, halfway between where they were then and where they are now is a reasonable approximation of where we think yields will be midyear.

—John R. Mousseau

A Brighter Outlook for Tin

Ahead of the Herd

Northern Venture Group


Dec. 23: Tin isn’t the most exciting metal, but it will play an important role in developing a new economy, reliant on green energy, electric vehicles, and advanced technologies like 5G, the Internet of Things, and artificial intelligence. For such a small market, tin has an impressive array of current and potential uses, putting it in the same league as silver, as a metal essential to modern electronics. Its primary use in tin-lead solder practically guarantees tin will enjoy steady demand for years, maybe even decades to come. This more than makes up for tin’s declining usage in kitchen foil and metal beverage containers.

This year, the tin price took a hit from the pandemic, but stormed back, gaining 45% since a mid-March low. When global economic growth resumes, following the rollout of vaccines, demand for tin and other industrial metals will surely pick up. When we factor in current and future supply shortages predicted by the experts, tin looks increasingly like a metal that forward-looking resource investors should have on their radar.

—Richard (Rick) Mills

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