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The Recession Leads to ... More Shacking Up?

What a Decline in Household Growth Means for Marketers

By Published on .

The U.S. added fewer new households in 2010 than at any time in the last 30 years, according to recently released Census estimates. The increase of 357,000 households represents just a 0.3% uptick compared with a 30-year average of 1.2%. The numbers have been declining since 2007. The U.S. population grew by 0.9% between 2008 and 2009, the most current numbers available, three times faster than the number of households.

A number of factors contribute to this decline. The rise in the multigenerational families, as younger Millennials, struggling in the job market, stay with mom and dad well into their 20s. Multi-generational households are growing from the other end as well. More and more older Americans, including many Hispanics, are living with their children and grandchildren for both cultural and financial reasons.

But a big rise in "shacking up" might be to blame as well. Between 2009 and 2010, there was a striking increase in the number of opposite-sex unwed couples living together. A 14% jump was noted by the Census Bureau, representing 868,000 households.

How romantic, right? All these couples taking their relationships to the next level, motivated by nothing but love. Oh, wait. There's the economy to consider. Rose Kreider notes in her Census Bureau working paper that these new couples were less likely to have both partners employed than couples who were already together. The number of couples with both partners working dropped nearly 10% since 2008 to just under half.

Only 76% of the men in these couples reported working in 2009, down 10% from the number of men in new 2009 couples.

Digging a little deeper, the numbers get even more interesting. Of existing couples, 40% of the men are 45 and older. Of the newly formed couples, that number drops to 26%. The percentage of those under 30 climbs from 23% to 37%. The figures for women in the relationships show corresponding shifts. The number of couples where both partners are black nearly double from 6.8% to 11.4% when you look at the differences between existing and new couples.

As always, we ask what this means for marketers. One thing that would seem obvious is that there are a lot of households that have been combined for fiscal reasons. As the economy improves, we should see demand for housing increase, which carries with it potential for sectors like furniture and household goods, appliances, electronics, landscaping, telecom -- we all need to be able to watch "Mad Men" somehow -- and more. In the short-term, those sectors will continue to hurt. The big question is ... when will this happen? "Not soon enough" isn't quite the answer we're looking for.

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