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The Big Dip In The Number Of Big Ticket Buyers


Economic Trends

THE BIG DIP IN THE NUMBER OF BIG-TICKET BUYERS

The current slowdown in sales of big-ticket items will persist throughout most of the industrial world through the rest of the decade, predict economists Gert von der Linde and Richard Hokenson of Donaldson, Lufkin & Jenrette Securities Corp. The reason: Industrialized nations are experiencing an unprecedented decline in the ranks of 20- to 29-year-olds, the key age group that establishes new households.

From 1991 to 2000, note the two economists, the number of people in this age bracket in North America and Western Europe will decline by about 17 million and will rise in Japan by less than 1 million. "It's no surprise," says Hokenson, "that the 1986 peak in housing starts, home sales, and car sales occurred in the very year that the U.S. had the most persons who were 25 years old." The ongoing decline in the number of young adults in almost all advanced countries, he suggests, means that efforts to reflate housing and consumption via macroeconomic policies will be less successful than in the past.GENE KORETZ


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