The latest consumer sentiment gauge suggests more gloom about the economy, even as it remains strong, but another indicator may belie that weak reading.
More Americans are planning to have a baby in the next year, according to a Bank of America survey, a possible sign that there’s at least enough optimism about the future to bring another life into this world.
In a research note on Wednesday, BofA said the share of respondents who said that they or their partner were expecting, or trying to have or adopt, a baby over the next 12 months rose to 12.4% in June from 11.5% in May. The latest reading is the highest since February 2023 and also up sharply from less than 8% in February of this year.
And the June bump isn’t necessarily seasonal. The BofA survey shows that this month’s reading was higher than those for June 2023 and June 2021 but lower than that of June 2022.
And as expectations rise for bigger households, that could be helping to drive the desire to find a new home.
The share of respondents who said they plan to buy a home in the next 12 months was 24.0% in June, roughly flat from May’s 24.3% but a big surge from the sub-20% prints throughout the second half of 2023 and first half 2024.
That’s even after mortgage rates spiked earlier this year when signs of sticky inflation dampened hopes for imminent rate cuts from the Federal Reserve.
Meanwhile, the University of Michigan’s consumer sentiment gauge fell to the lowest level in seven months, plunging to 65.6 in June from 69.1 in May and defying forecasts for an improvement to 72.
To be sure, expressed intentions to have a baby are different from actual fertility rates, which have been falling for years and hit a record low in the U.S. last year of 1.62 births per woman. That’s as more Gen Zers report they only plan to have one kid, while sperm counts have been in decline for decades in what some call a global “spermpocalypse.”
Other developed economies have been seeing similar trends, which could weigh on their growth potential. Low fertility has alarmed governments in East Asia so much that they have rolled out more financial incentives, which have so far made little impact.
The decline has also alarmed Tesla CEO Elon Musk, who has famously called the world’s rapidly falling birth rate “one of the biggest risks to civilization.”
“So many people, including smart people, think that there are too many people in the world and think that the population is growing out of control. It’s completely the opposite,” he said in 2021. “Please look at the numbers—if people don’t have more children, civilization is going to crumble, mark my words.”