INSIGHTS: WHY AMERICANS MOVE
Guest Columnist Ann Crislip is a contributing writer and media specialist. She produces content for a variety of moving industry blogs. Printed with permission.
What percentage of Americans currently live in the town or city where they grew up?
The U.S. Census Bureau reported that the percentage of Americans moving over a one-year period fell to a new low in 2016; only 11.2% of the population had moved compared to the previous year. Despite the fact that many Americans move multiple times over the course of their lifetimes, a large percentage elect to stay close to home. In fact, nearly 72% of Americans live in or close to the city where they grew up.
Why They Stay
Of the survey respondents who indicated that they’ve stayed close to home, nearly half said that their decision was made so that they could stay close to family. Being near family and loved ones is consistently found to be a motivator for those who either relocate or stay. Another 24% of survey respondents indicated that they’ve stayed close to home for familiarity and comfort, while 13% said the low cost of living kept them close to home.
Similar results were found when the Pew Research Center conducted two studies in 2017 exploring what makes life most meaningful to Americans. The first survey asked for open answers phrased in the respondents’ own words. The second was a closed-ended survey that provided a set of answers for respondents to choose from.
In both studies, family ranked high among what individuals value. In the open-ended survey, 69% of respondents mentioned family when writing about what gives them a sense of meaning. The next-highest factor was career, showing up in 34% of answers, followed by money, which appeared in 23% of answers. In the closed-ended survey, family dramatically outranked the other options, counting as the most important source of meaning for 40% of respondents. The family factor was followed by religious faith, which carried the most meaning among 20% of respondents.
Who Stays Near Home
Women are more likely to stay near home than men. Of the survey respondents, 75% of women lived in or close to the city where they grew up compared to 68% of men. Of the women who stayed, 51% wanted to stay close to family, and a quarter stated they did so for familiarity and comfort. Among the men who stayed close to home, 48% did it for family and 22% for familiarity. Fifteen percent of men stayed near home for a job compared to 12% of women.
Of those who didn’t stay close to home, however, women were more likely to leave their state of residence. While 69% of men moved out of state, this decision applied to 72% of women. Family again played a role. Twenty-four percent of women moved out of state to be close to family compared to 19% of men. Meanwhile, 15% of men left their state of residence for the climate while only 9% of women moved for this reason.
How Long Americans Have Stayed Near Home
More than 30% of Americans have lived in or near their hometown for at least 10 years. Another 18% have lived near home for 11 to 20 years, and 20% lived close by for 21 to 30 years.
Tenure falls as Americans age. Thirteen percent of those ages 31 to 40 live near the city where they grew up, as do 13% of people ages 41 to 50. Six percent of Americans have lived in or close to the place they were born for 50 years or more.
Why Americans Move
Among the survey respondents who indicated that they no longer lived in or near the city where they grew up, 30% had still stayed within the same state. Their reasoning was similar to that of respondents who stayed in their hometown, with 43% indicating that they wanted to stay close to family and 22% saying that they liked the familiarity and comfort of staying in the state that they knew. A low cost of living was the primary reason to stay for 13% of respondents.
Among the 70% of respondents who had moved out of state, their job was a primary factor. Forty-two percent of respondents who left the state where they grew up did so for work. Meanwhile, family factored into out-of-state moves as well. Twenty-two percent of respondents who left the state where they grew up did so to be closer to family, while 12% moved to pursue a lower cost of living and another 12% moved for a change of climate or environment.
When Moves Take Place
The most common time for individuals to move out of the state where they grew up was between the ages of 18 and 30. In this period, 38% of those who left their state of residence made their move. Only 32% moved after the age of 30. This finding coincides with the period when Americans typically start having families . The average age of first-time mothers in the United States is 26, and the average age of a first-time father is 31.
Although a direct correlation wasn’t reported, it seems that as families grow, the rate of individuals moving out of state falls somewhat. Stability and familiarity are established, and the logistics of moving become more difficult as families grow and children enter school.
The Bottom Line
The above data expounds only upon individuals who have left their hometown. This data doesn’t provide insights into the large number of people who move but stay within or near the place where they grew up. A number of respondents mentioned above who did not leave the area may have moved several times while staying around the same city. According to the U.S. Census Bureau, 42% of people who moved did so for a new or better home or apartment.
Moving is a big decision with many consequences, but it’s worth the effort for many individuals. As the numbers show, staying close to family consistently ranks high among the reasons to choose a home. If family members leave an area, it’s likely that others will follow, particularly if they don’t have any other family nearby. The right home is often a matter of finding the right job, an affordable cost of living, and proximity to those who matter most.
We surveyed 2,000 Americans with an age of at least 25 years old asking them if they have moved in relation to their hometown.
ON THE ECONOMY: 2020 JDA PREDICTIONS
John Dunham, Managing Partner, John Dunham & Associates
Greetings, my friends. We are all interested in the future, for that is where you and I are going to spend the rest of our lives. So began one of the great cult movie classics of all time, Ed Wood’s Plan 9 From Outer Space. The narrator of the film was a former radio announcer known as the Amazing Criswell. Criswell was famous for his bizarre predictions including a claim that the earth would be struck by a ray from space that would cause all metal to adopt the qualities of rubber, leading to horrific accidents at amusement parks. He also suggested that the end of the planet would happen on August 18, 1999. While Criswell never claimed to be a real psychic, and his bizarre prognostications were for entertainment only, many of those who make forecasts are not always so humble.
In our final Monthly Manifesto of the year we like to examine the predictions that were made through 2019. Interestingly, many early financial predictions came true. Let’s start with GDP. At the beginning of the year, the Federal Reserve and the CBO forecast GDP growth of 2.3 percent, and if the year ends as expected, actual GDP will be up by just slightly more (2.4 percent). The average forecast of Wall Street economists, was for growth in the S&P 500 to be a remarkable 25 percent in 2019, and as of this writing, the market is up by 27 percent.
Of course, bad predictions abounded for 2019. Psychic Nikki said that she wouldn’t be surprised if a spaceship landed by the end of 2019. Baba, the “Nostradamus from the Balkans” predicted an assassination attempt on Russia’s president Putin coming from inside his own security team. Stephen Carter from Bloomberg predicted that, after failing in an attempt to impeach the President, the Never-Trumpers would begin a gofundme campaign to raise $1 billion to pay the President to resign, while Harpers Bazar predicted that the President would simply resign. Nearly every CNN political commentator was certain that by now, Robert Francis O’Rourke would be the leading contender for the Democrat party nomination. Across the pond, the Independent newspaper in Britain predicted that Theresa May would pass Brexit legislation (and correctly that Jeremy Corbin would be forced from leadership of the Labour Party). Finally, in an interesting twist, an Australian psychic predicted that there would be some sort of controversy in the Royal Family and that William would be the King of England before the end of 2019.
As we say every year, we should all be wary of predictions, and particularly of the computer models that all of us rely on to make them. The fact is, as economist John Kenneth Galbraith has been quoted as saying, “There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.” Then again, the Simpsons forecast back in 2007 the impassioned, er… speech, by activist Greta Thunberg with an eerily similar one by Lisa.
With this in mind, how did JDA do in its predictions for 2019?
Well, it depends on if you care about financial markets. It seems that we were pretty spot on with our GDP forecast, our consumer spending forecast and our average unemployment rate forecast for the year. While they are slightly optimistic, we have not yet seen the 4th quarter numbers and they are all likely to be quite solid.
Our inflation forecasts have been high for a while now, and that has led to the overly high interest rate forecasts. We have held to our guns on this, and continue to believe that it is impossible for inflation to remain as low as has been reported while at the same time debt levels are through the roof, and unemployment rates are in the cellar. Overly high inflation forecasts led to high forecasts for all of the interest rates, but it is important to remember that the 2-year note was at 2.5 percent at the beginning of the year and almost everyone was forecasting a pretty robust 2019.
So we give ourselves a pretty solid B for 2019. Our forecast of the real economy was pretty good, and even though we got interest rates wrong, the lack of measured inflation seems improbable, and we may see a shock in the near future.
So, what are we seeing for 2020?
While we do not believe that there will be a recession in the coming year, we continue to temper our growth forecasts since it seems an impossibility that the US economy will continue to grow indefinitely, particularly as signs of pretty massive malinvestment in asset markets are starting to show up. In spite of an end of the trade wars in the early part of 2020, growth will moderate since demand is being fueled by debt. The minute that there are signs of inflation, the low interest rate environment will begin to turn.
Inflation is likely to be driven by two factors. First, the cost of workers. The Employment Cost Index (ECI) has been outpacing inflation for years, and the growth rate has been increasing. We believe that there will be a big bump in the first part of 2020 as huge increases in health insurance prices are coming. In addition, the tight job market and increasing minimum wages are forcing up overall wages faster than growth in the overall economy, something that is bound to show up in the inflation numbers. In addition, the cost of the tariff taxes is now being felt in consumer prices, and even if the administration is able to reach new agreements with China and Europe, these costs are now baked in.
If our inflation forecasts are at all correct, we expect interest rates to begin to rise, and as it follows the market, the Federal Reserve will be forced to rapidly increase the Federal Funds Rate – possibly as many as three times in the first part of the year. We believe, as generally happens, this will be an overreach on the part of the Fed, and would begin to harm asset markets, rapidly bringing down inflation rates and with them interest rates. So, our forecast is for a see-saw in rates over the course of the year.
We are now forecasting that GDP in 2019 will grow at a rate of about 1.7 percent for the year, with weak shoulders in the first and fourth quarters. In fact, our current forecast is for a brief and shallow recession following the election. That of course assumes that there is not a massive move by the electorate toward socialism. Were that to happen, everyone’s forecasts would go out the window and there would likely be a very significant recessionary plunge beginning in November. Consumer spending will track along with GDP, and be much softer in 2020 than it has been this year.
Our models continue to forecast significant job growth; however, labor force participation levels have started to creep up finally (rising by 1 percentage point since their low in 2015). At the same time, growth in the labor force on a year over year basis has been below 1.5 percent since April and should continue to fall over the course of the year. This should continue and that will start to pull unemployment upward. Unemployment rates should continue to stay quite low through 2020, likely not moving much above 5 percent or so even if there is a 2021 recession.
All in all, we think that the economy will continue to grow at a good clip at least until the elections, the results of which will determine the nature of the recession that will follow. An economy cannot be built on debt and share buy-backs, and needs real investment if it is going to continue to grow. We believe that the deregulatory push is real, and if it continues will help to ensure that any recession will be brief.
Based on these general findings, our most recent forecasts for 2020 are presented in the following chart.