A little over a week ago, we reported on one of the biggest deflationary threats looming over the global economy: that is, China’s shrinking population, as deaths outpace births for the first time, a trend that demographers believe will only worsen as the impact of China’s one-child policy is felt on its population numbers.
And as Wall Street banks and America’s largest corporations complain about growing inflationary pressures in their sell-side research and earnings calls, the latest population update from the CDC has just confirmed that the deflationary trend of a falling birth rate continued last year in the US. In fact, one could argue this trend has been supercharged by the pandemic, thwarting theories about a lockdown “baby boom” as the number of births in the US fell by 4% in 2020, dropping to the lowest level since 1979.
Put another way: thanks to the pandemic, US birth rates have fallen to their lowest level in a generation.
Birth rates dropped across every race, ethnicity and age group – even teenagers (though teenage birth rates have been falling in the US for decades), according to the data, which was published by the CDC’s National Center for Health.
As we noted at the time, a shrinking population is bound to create serious challenges for China’s debt-fueled economy. It’s one reason to doubt President Xi’s propaganda about China being “on the rise” globally.
Still, declining birth rates are a problem across the developed world, and the US is no exception. The provisional data for 2020, at 3.6MM births, marks the 6th annual drop in a row. The decline will likely continue in 2021, when the brunt of the impact from the pandemic will be recorded, but with a nine-month delay.
Bloomberg suggested that fears of contracting the virus while pregnant, or while in hospital to give birth, combined with job insecurity and government measures limiting social contact and business activity, dissuaded Americans from having babies, according to surveys by Ovia Health, a women’s health technology company.