White House Study Reveals - 15 Facts Investors Should Know About Millennials

Chances are most investors aren't even aware that this comprehensive report exists.In October 2014, the President's Council of Economic Advisers released a 49 page report of containing essential information and economic finding pertaining to the Millennial generation. This first chart shows why understanding the Millennial generation is so crucial for businesses and investors.Millennials have eclipsed Baby Boomers as the largest population cohort in the U.S. and here is how they differ in many respects from their parents' generation.15 Economic Facts About Millennials1. Millennials are now the largest, most diverse generation in the U.S. population.2. Millennials have been shaped by technology.3. Millennials value community, family, and creativity in their work.4. Millennials have invested in human capital more than previous generations.5. College going Millennials are more likely to study social science and applied fields.6. As college enrollments grow, more Millennial students rely on loans to pay for post-secondary education.7. Millennials are more likely to focus exclusively on studies instead of combining school and work.8. As a result of the Affordable Care Act, Millennials are much more likely to have health insurance coverage during their young adult years.9. Millennials will contend with the effects of starting their careers during a historic downturn for years to come.10. Investments in human capital are likely to have a substantial payoff for Millennials.11. Working Millennials are staying with their early career employers longer.12. Millennial women have more labor market equality than previous generations.13. Millennials tend to get married later than previous generations.14. Millennials are less likely to be homeowners than young adults in previous generations.15. College educated Millennials have moved into urban areas faster than their less educated peers.2 Scary ChartsMost Americans already realize that this will be an economic headwind for many years to come.The percentage of borrowers who graduated with a certificate from a for-profit, less-than-four-year institution is a sad commentary on the risk/reward proposition. However, it is notable that the data set is primarily from years prior to the Great Recession; more recent data would be reflective of a much slower economy for 2009 to 2012.1 Sobering ChartThe 67 percent of FICO scores 680 and below, combined with high levels of student debt, will likely serve to extend the existing trend of low home ownership by Millennials.ConclusionsIt appears that homebuilders, automobile manufacturers and dealerships, as well as other durable goods manufacturers, may face considerable headwinds moving forward from Millennials stuck with paying off student debt and saddled with low credit scores.On a much brighter note, the current low prices at the gas pump are a rising tide that lifts all ships, (with the possible exception of oil tankers in the Houston shipping channel). However, it is uncertain how long that this unanticipated windfall will continue to boost Millennial household incomes. (Investors interested in reading the full report can find it at this link).