The cool thing about people and economics (if there can be anything cool about economics), is the power of averages and human nature. As people age, they move through distinct stages of life. While this progression can be interrupted by circumstances such as war or a huge economic upheaval, people still want to hit the milestones in life.
This makes a lot of things, like the growth and contraction of weddings, very predictable.
During the 2000s, the front end of the next large generation — the millennials — had begun entering the workforce. This stepping stone in life is typically followed by renting apartments and then getting married.
Tying the knot acts is a spending supercharger, because it sets in motion the process of buying a home and having children, both of which are very expensive.
Then we got hit with the financial crisis. While weddings still occurred, hundreds of thousands of people delayed their wedding plans, hoping for better times ahead. Even though six years have gone by, it’s hard to argue that the U.S. economy has enjoyed a sustained recovery, especially for those who are in the younger generations.
Good jobs are difficult to come by and wages have remained flat. But the days and months keep rolling by and to paraphrase an old quote, “time waits for no man.”
Now we have even more young people in the normal age range for marriage as the millennials grow older, plus those who were waiting for better times. There appears to be some pent-up demand for nuptials that is now showing up in the marketplace.
The number of weddings in the U.S. was up 3.7% in 2013… that is 2,156,300 weddings. It’s expected to climb by 4% both this year and next. This is good for our economy both today and in the future.
Whether a marriage is small or a big shindig, there tends to be a boost in spending with the event. It doesn’t matter if the funds used on the wedding are from savings or are borrowed, the dollars still flow into the economy and become someone else’s income.
From a long-term perspective, as mentioned above, marriages are the normal starting point for much greater spending as families grow. The newlyweds become new parents, then new homeowners, and buy all the things that go into supporting those roles.
This trajectory is the underpinning of our work at Dent Research, because we use the number of consumers in each stage of life to estimate demand for the products and services that are common in each stage.
As I’ll explore in the next edition of Boom & Bust, according to our research we are currently in a down period, or economic winter season, but the future looks bright. Starting with weddings, there should be more positive news for the economy in the years ahead.
Of course, the fact that these positive trends begin with weddings isn’t all good news for everyone. Someone has to pay for these things… and it typically falls to parents.
According to the website TheKnot.com, the average cost of a wedding in the U.S. reached $29,858 in 2013. This figure includes all the things associated with the big day, like the rings, venue, catering, and entertainment, but does not include the honeymoon.
That being said, the cost of a wedding varies dramatically by location. In Manhattan the average wedding costs $87,000, while getting hitched in Utah was less than $17,000.
As the parent of two daughters under 20, I’m wondering if it’s too late to move out west.
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