The U.S. Economy’s Secret Weapon: Seniors With Money to Spend

livemint.com:

Why has consumer spending proven so resilient as the Federal Reserve has raised interest rates? An important and little-appreciated reason: Consumers are getting older. In August, 17.7% of the population was 65 or older, according to the Census Bureau, the highest on record going back to 1920 and up sharply from 13% in 2010. The elderly aren’t just more numerous: Their finances are relatively healthy and they have less need to borrow, such as to buy a house, and are less at risk of layoffs than other consumers.

This has made the elderly a spending force to be reckoned with. Americans age 65 and up accounted for 22% of spending last year, the highest share since records began in 1972 and up from 15% in 2010, according to the Labor Department’s survey of consumer expenditures released in September. “These are the consumers that will matter over the coming year," said Susan Sterne, chief economist at Economic Analysis Associates.

“Our large share of older consumers provides a consumption base in times like today when job growth slows, interest rates rise and student-debt loan repayments begin again," she said. Seniors’ high spending propensities reflect health, wealth and perhaps lingering psychological effects of the pandemic. “All my life it was, save for this, save for that," said Maureen Green, 66, of Cape Cod, Mass.