Gen Z Pessimism: A $12 Billion Blow to U.S. Economy
Eleanor Pringle’s recent report at Oxford Economics presents an alarming economic diagnosis for Generation Z, highlighting their struggle with joblessness, pessimism, and the ongoing trend of living with parents, culminates in a substantial $12 billion decrease in national consumption. This generation isn’t merely a victim of circumstances; their financial struggles cast a shadow over the broader economy.
Gen Z’s Struggle With the Job Market
The labor market’s current state, described as “no-hire no-fire,” presents formidable challenges for Gen Z, the cohort aged 13 to 28. The hiring rate, which has been on a downturn since 2022, now resembles levels seen during the COVID-19 pandemic. According to Oxford Economics, young job seekers face an uphill battle, with unemployment rates significantly higher than the national average. Fortune
The Financial Implications of Staying at Home
A notable outcome of the adverse job market is the increasing number of young adults, especially those aged 22-28, residing with parents. This trend detracts from the economy as these individuals spend less on rent, food, and commuting. As these financial burdens alleviate within family households, the economy loses approximately $12 billion annually due to reduced consumer activity.
Parallels with the Millennial Experience
The plight of Gen Z resonates with the past experiences of Millennials. The economic tremors of the Great Recession significantly impacted Millennials when homeownership became an elusive dream for many. However, as of 2025, 55% have become homeowners, indicating hopeful prospects for Gen Z as market conditions evolve.
The Psychological Toll on Young Adults
The prolonged stagnation in career advancement and wage growth for young workers fosters a mindset of caution and pessimism. As noted by Grace Zwemmer, perceptions of labor market conditions are integral to a young adult’s financial well-being. For Gen Z, the persistent uncertainty contributes to cautious spending behaviors, further impacting their economic engagement.
A Glimpse of Hope Amidst Economic Challenges
While it’s evident that Gen Z is navigating a challenging economic landscape, the historical precedent set by Millennials hints at potential recovery. The eventual adjustment in market dynamics could empower Gen Z to reinvigorate their financial independence. As the economy recalibrates, perhaps this generation, too, will find resilience in restructuring their economic footing.
