With the U.S. economy near full employment, this year’s first quarter GDP growth of less than one percent was more than disappointing. In what may be a related finding, a new Morning Consult poll suggests that fewer Americans are spending their tax refunds. Instead, they’re socking the money away or paying off debt.
Why are we surprised? The aging Baby Boom generation – 75 million people or so -- is on the downside of their earnings (if they’re earning anything at all), and many are terrified of not having saved enough for their retirements.
Generation X, which weighs in at a mere 62 million, tells a different story. Many saw their parents lose their lifelong corporate jobs when they were children. That was when Reengineering the Corporation was the business bible and downsizing was all the rage. As a result, many Gen Xers, distrustful of big business, decided to go it alone and become entrepreneurs. Of course, few succeeded, and many ended up in debt or underemployed.
The Millennials are the largest generation – almost 80 million. They’re just hitting their stride as earners, but many carry crushing amounts of college debt. So, they’re careful with their money and don’t overspend.
No wonder the economy is just puttering along.
Here are the highlights from the Morning Consult poll:
- 58 percent of Americans filed taxes early, expecting to get money back.
- 31 percent said they would use their refund to pay down debt.
- Another 24 percent would save the money.
- Clothing, food, vacations and home improvement came next, but all four were under 10 percent.