From Home Furnishing Business
Generation X Might Not Be a Bust After All
Historically named the “Baby Bust Generation,” Generation X babies are now roughly 35 to 50 years old and born between 1966 and 1981. Sandwiched between the Baby Boomers and Millennials, Generation X is often overlooked by media and marketers as a worthy target – instead focusing on upcoming Millennials and their future economic influence. Once considered too small in size to make an impact, Generation X is now almost 70 million strong and is the largest generation of consumers alive, ages 21 to 65. Moreover, they are increasing their earning power rapidly with more going toward their home furnishings purchases.
They have been much maligned as a generation of latchkey kids growing up in an era where divorce rates more than doubled. They have been purported to distrust the big corporations they feel mistreated their loyal parents and yet are now taking over the high paying jobs of baby boomers as they retire in record numbers. Gen Xers are revolutionizing the business world with their demands for a work-life balance and place a high priority on their families and homes.
These 35 to 50 year olds also have over 50 percent of the children under 18 – further extending their buying power. With homeownership rates up and furniture expenditures at their highest in years for ages 35 to 44, Generation X is poised to make a significant mark over the next five years and beyond.
At 69.8 million, Gen Xers trail behind both Millennials and Baby Boomers in size (Table A), but as Table B shows the current adult population of Generation X is higher than the Millennial’s 66 million as many are still under the age of 18. While Gen Xers are still smaller than the living Baby Boomers (74.9 million), they now have more buying power.
As shown in Table C, the population of the “Baby Bust Generation” is now much larger than originally projected due to immigration. With 58.5 million births between 1966 to 1981, Generation X has grown by almost 20 percent (19.3) in numbers.
Although smaller in total population, Gen Xers are the largest adult consumer population at 37.5 percent of adults ages 21 to 65 (Table D).
Gen Xers are in their prime earning years. As Baby Boomers retire more high paying jobs will open up to experienced and ready Gen Xers. In 2015, median income (Table E) was the highest for Generation X 45 to 49 year olds at $76,095, followed by 40 to 44 year olds at $72,143. In addition, the youngest of the Gen Xers, the 35 to 39 year olds, had the fastest growing incomes last year with median income increasing 9.2 percent over the previous year (Table F).
Gen Xers ages 35 to 50 are in their prime family purchasing years for both themselves and their families. Over half (52.9 percent) of children (65.7 million children) under 18 reside in Gen Xer homes (Table G). Over 80 percent of those Generation X households are married couples.
Gen Xers are only slightly less educated than the younger Millennials with 35.7 percent attaining bachelor’s degrees or higher. For 35 to 50 year old Gen Xers, 38 million have some college or higher degree.
Gen Xers have followed the Baby Boomers in their love of homeownership but were temporarily stymied by the recession. Homeownership among all three Gen X ages is now well above 50 percent with 61.6 percent of 40 to 44 year olds owning a home and 68 percent of 45 to 49 year olds (Table I). With homeownership rates bouncing back, Generation X has dramatically increased furniture spending.
Last year saw a dramatic increase in furniture expenditures by Gen Xers according to the government’s Consumer Expenditure Survey. The heart of Gen Xers (ages 35 to 44) is spending the most on furniture of any consumer group averaging $672 annually. This survey reflects about 55 percent to 60 percent of furniture expenditures.
With the Baby Boomers aging out of prime buying years and the Millennials still pouring into adulthood, Generation X is the here now for the furniture industry. Industry leaders should keep their focus on this bread and butter generation that may just be the consumers that transition our industry toward real prosperity.