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Are Millennials Different From the Rest of Us?

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They’re better educated, more diverse, but earn less in a world of increasing inequality. They have fewer assets and lower marriage rates, but millennials don’t differ much from earlier generations in their consumption behavior.

These are just some of the findings from a new Federal Reserve report, “Are Millennials Different?”

In addition to their younger age — millennials range in age from 21 to 37 — and the fact that they now constitute the largest population cohort in the U.S., millennials are distinguished by their lagging economic standing.

The real average full-time labor earnings of a millennial male household head in 2014 were about the same as those for a comparable male Generation X household head in 1998 and more than 10% lower than a comparable male baby boomer household head in 1978.

For female heads of all households, the median labor earnings in 2014 were about 3% lower than those of comparable female Generation X household heads in 1998.

While millennials earn less than earlier generations when they were just as young, many borrow more, at least for college.

Thirty-three percent of millennials owed student debt in 2017 compared with 20% for Gen Xers in 2004, and their balances were higher: $18,000 versus $13,000. 

A slightly larger percentage of millennials in 2017 had an outstanding auto loan in 2017 compared to Gen Xers in 2004: 40% vs. 36%, according to Equifax/CCP data, and their outstanding balances were both around $5,200.

But a much lower percentage of millennials owed mortgage debt, primarily because fewer buy homes. Nineteen percent of millennials had a mortgage in 2017, compared with 28% of Gen Xers in 2004. The median mortgage balance for millennials, however, was higher — $105,000 in 2017 versus $94,000 for Gen Xers in 2004, largely reflecting higher housing costs.

Given their relatively lower incomes coupled with relatively comparable debt levels, millennials have a lower real net worth than earlier generations when they were young.

The average real net worth of millennial households was about $92,000 in 2016, around 20% less than baby boomer households in 1989 and nearly 40% less than Generation X households in 2001.

The Federal Reserve report is based on multiple data sources dating back to 1986, but only 5% of its full sample of 129,000 households are millennial households compared to 40% for baby boomer households and 18% for Gen X ones.


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