Evelyn Reynolds

More than half, or 53%, of Gen X parents fear that their kids will need financial support into adulthood, according to a U.S. Bank survey.
That’s compared with 37% of all parents, per the data.
Gen X is facing unique challenges that can heighten these concerns.

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As Adinah Caro-Greene maps out her financial future, there’s a variable that may have held less weight for previous generations: her child.
The employee benefits broker said she’s seen how rising education, housing and health-care costs have created economic challenges for her Gen Z son and his peers. Part of the Bay Area resident’s long-term financial goals is to fully pay off a rental property that he can inherit and potentially live in.

“It’s uniquely hard for kids now,” said Caro-Greene, 45. “Seeing how hard it is for my son’s generation has motivated me to do what I can.”
Caro-Greene isn’t alone. A majority — or 53% — of Gen X parents who are worried their child may need financial support well into adulthood, according to a U.S. Bank survey of around 2,500 adults released earlier this year. That’s compared with just 37% of parents across all generations.

Gen X is a “sandwich” generation, facing the financial pressures of simultaneously supporting parents in retirement and kids as they come of age. Most Americans are grappling with the runaway inflation that followed the pandemic, but parents in this age group are uniquely focused on whether their kin will ever be able to make it without monetary aid.

A ‘worried’ generation

Gen Xers have grown up amid less-than-ideal economic conditions, which can bolster feelings of uncertainty, said Tom Thiegs, family wealth coach at U.S. Bank’s Ascent Private Capital Management. Notably, he pointed out that they’ve witnessed four of the five largest stock market crashes in history within their lifetimes.
They were among the first to mainly utilize 401K plans for retirement rather than pensions, he said. Now, this group is also questioning if Social Security and Medicare will stay around long enough for them to reap the benefits of systems they helped support throughout their adult lives, Thiegs said.

Clients Thiegs talks to are “worried,” but not to the extent that they’re “paralyzed,” he said, explaining that these clients have been through economic downturns before. Instead, he’s noticed a mindset among Gen X of being ready to roll with any unexpected punches.
“It’s not just all doom and gloom for Gen X,” he said. “There’s also this understanding that we’ll be able to figure it out.”
Gen X parents aren’t necessarily concerned that they’ll be in the hook for their kids’ poor financial choices. In fact, the U.S. Bank survey found 79% said their children are able to “successfully” manage their finances.
Instead, this economic stress stems from factors outside of parents’ or children’s control, Thiegs said. Beyond rising prices for everyday needs like groceries, he pointed to higher housing costs as a factor that’s left Gen Z in a more financially precarious position.

The bank of mom and dad

Caro-Greene said it’s common among parents she knows to give money to their young-adult children, especially given the high cost of living in the San Francisco area. It’s a particularly hard time, she said, because of what she charactized as a tough job market for those entering the white-collar workforce.
Expenses for even the youngest in corporate America can add up. A Savings.com survey published this year found parents that offer financial support to their kids were shelling out $1,384 a month on average. When looking just at Gen Z offspring, that figure shot up to $1,515.
That can lead to a question of how long, or to what extent, parents should be footing bills for their kids into adulthood, according to Marguerita Cheng, who is both a mother and certified financial planner. The answer is both simple and highly individual, she said.
“I would never tell you not to help your child,” said Cheng, CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland. But, “it’s important to have boundaries or limitations to giving.”
Cheng said parents should avoid helping their child to the point that they, themselves, will deplete savings and struggle in retirement. She also said parents can try to remove the stigma around discussing money and shame around decisions like living at home after graduating college.
For those that do have the means to help out, she’s found clear guidelines can be a useful tool. For example, a parent might set a cap on how much money they will give a child who is moving, or distribute funds incrementally over a predetermined timeframe.
Given Gen X’s experiences, Thiegs has found the generation thinks differently about their dollars and how to use them. It’s an equation, he said, that increasingly includes children and other family members.
“They’ve broadened into a more holistic view of money,” Thiegs said. “It’s not just balancing your checkbook, but also understanding what, long term, do I want for my life.”

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Britain’s economy contracted unexpectedly in October, according to data from the U.K.’s Office for National Statistics.
GDP fell by 0.1%, the latest print showed, marking the second consecutive monthly downturn.
The British pound was trading lower against the dollar Friday morning.

Bank of England in the City of London on 6th November 2024 in London, United Kingdom. The City of London is a city, ceremonial county and local government district that contains the primary central business district CBD of London. The City of London is widely referred to simply as the City is also colloquially known as the Square Mile. (photo by Mike Kemp/In Pictures via Getty Images)
Mike Kemp | In Pictures | Getty Images

The U.K. economy contracted unexpectedly in October amid uncertainty from businesses and consumers ahead of the newly elected government’s budget announcement.  
Gross Domestic Product fell by an estimated 0.1% on a monthly basis, the ONS said Friday, with officials attributing the downturn to a decline in production output. Economists polled by news agency Reuters had projected a 0.1% rise in GDP in October.

It marked the country’s second consecutive economic downturn, following a 0.1% GDP decline in September.
Real GDP is estimated to have grown 0.1% in the three months to October, the ONS said, compared to the previous three months ending in July.
Sterling declined on the back of the disappointing print, trading 0.3% lower against the U.S. dollar at $1.2627 by 7:45 a.m. London time.
In a statement on Friday, U.K. Finance Minister Rachel Reeves conceded that the October figures were “disappointing,” but defended the government’s divisive economic strategies.
“We have put in place policies to deliver long term economic growth,” she said, citing changes such as a cap on corporation tax and the launch of a 10-year infrastructure strategy.

In late October, Reeves unveiled the government’s first budget since replacing the longstanding Conservative government in July.
The budget included plans from Prime Minister Keir Starmer’s government to raise taxes by £40 billion ($50.5 billion). Reeves said at the time that this would be achieved through a raft of new policies, including a hike in employer National Insurance payments — a tax on earnings — as well as a rise in capital gains tax and the scrapping of winter fuel payments to pensioners.
Some of the policies have been met with widespread criticism. The national insurance payroll tax hike, for example, has prompted warnings from businesses that they will be less likely to take on new workers, with a report from recruitment site Indeed this week suggesting the policy had already had an effect on British job openings.

Interest rate impact

The October GDP print marked a fresh blow to the U.K. economy, which is still struggling to keep inflation in check and also saw weak consumer confidence data in a new reading published Friday.
However, market watchers are not convinced the latest data will alter the Bank of England’s commitment to a “gradual” lowering of interest rates.
The central bank cut rates by 25 basis points at its most recent meeting in November, and is expected to hold rates steady at 4.75% at its subsequent meeting next week, according to overnight index swap data.
Thomas Pugh, U.K. economist at RSM, said the fresh round of data — coupled with inflation in Britain creeping back up toward 3% — indicated a risk that the U.K. was “slipping back into stagflation territory.”
“We still expect the economy to reaccelerate into 2025 — that said, our forecast of 0.3% quarter-on-quarter growth in the fourth quarter now looks too ambitious,” he said.
“In any case, we doubt that today’s data is bad enough to push the Bank of England into surprising markets with an early Christmas present of a rate cut at its meeting on Dec. 19th.”
Meanwhile, Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, agreed a Christmas rate cut was “doubtful.”
“Despite these gloomy figures, the likelihood of a rate cut this month remains low with some policymakers likely to be concerned enough by the recent pick-up in inflation to defer relaxing policy again until February,” Thiru said in a note. More

The producer price index increased 0.4% for November, higher than the Dow Jones consensus estimate for 0.2%.
However, excluding food and energy, core PPI increased 0.2%, meeting the forecast.
First-time claims for unemployment insurance totaled a seasonally adjusted 242,000 for the week ending Dec. 7, versus the 220,000 forecast and up 17,000 from the prior period.

A measure of wholesale prices rose more than expected in November as questions percolated over whether progress in bringing down inflation has slowed, the Bureau of Labor Statistics reported Thursday.
The producer price index, or PPI, which measures what producers get for their products at the final-demand stage, increased 0.4% for the month, higher than the Dow Jones consensus estimate for 0.2%. On an annual basis, PPI rose 3%, the biggest advance since February 2023.

However, excluding food and energy, core PPI increased 0.2%, meeting the forecast. Also, subtracting trade services left the PPI increase at just 0.1%. The year-over-year increase of 3.5% also was the most since February 2023.
In other economic news Thursday, the Labor Department reported that first-time claims for unemployment insurance totaled a seasonally adjusted 242,000 for the week ending Dec. 7, considerably higher than the 220,000 forecast and up 17,000 from the prior period.
On the inflation front, the news was mixed.
Final-demand goods prices leaped 0.7% on the month, the biggest move since February of this year. Some 80% of the move came from a 3.1% surge in food prices, according to the BLS.
Within the food category, chicken eggs soared 54.6%, joining an across-the-board acceleration in items such as dry vegetables, fresh fruits and poultry. Egg prices at the retail level swelled 8.2% on the month and were up 37.5% from a year ago, the BLS said in a separate report Wednesday on consumer prices.

Services costs rose 0.2%, pushed higher by a 0.8% increase in trade.
The PPI release comes a day after the BLS reported that the consumer price index, or CPI, a more widely cited inflation gauge, also nudged higher in November to 2.7% on a 12-month basis and 0.3% month over month.
Despite the seemingly stubborn state of inflation, markets overwhelmingly expect the Federal Reserve to lower its key overnight borrowing rate next week. Futures markets traders are implying a near certainty to a quarter percentage point reduction when the rate-setting Federal Open Market Committee concludes its meeting Wednesday.
Following the release, economists generally viewed the data this week as mostly benign, with underlying indicators still pointing towards enough disinflation to get the Fed back to its 2% target eventually.
The Fed uses the Commerce Department’s personal consumption expenditures price index, or PCE, as its primary inflation gauge and forecasting tool. However, data from the CPI and PPI feed into that measure.
An Atlanta Fed tracker is putting November PCE at 2.6%, up 0.3 percentage point from October, and core PCE at 3%, up 0.2 percentage point. The Fed generally considers core a better long-run indicator. A few economists said the details in the report point to a smaller monthly rise in PCE inflation than they had previously expected.
“It appears that only an exogenous shock such as dramatic tariff policy shifts would be capable of derailing supply-side contributions toward inflation’s return to the Federal Reserve’s 2.0% average goal in the near term,” PNC senior economist Kurt Rankin wrote.
Stock market futures were slightly in negative territory following the economic news. Treasury yields were mixed while the odds of a rate cut next week were still around 98%, according to the CME Group.
One reason markets expect the Fed to cut, even amid stubborn inflation, is that Fed officials are growing more concerned about the labor market. Nonfarm payrolls have posted gains every month since December 2020, but the increases have slowed lately, and Thursday brought news that layoffs could be increasing as unemployment lasts longer.
Jobless claims posted their highest level since early October, while continuing claims, which run a week behind, edged higher to 1.89 million. The four-week moving average of continuing claims, which smooths out weekly volatility, rose to its highest level in just over four years. More

If President-elect Donald Trump is going to push inflation back down to a more tolerable level, he will need help from housing costs.
It’s not clear that inflation is consistently and convincingly headed back to the Federal Reserve’s 2% goal, at least not until housing inflation eases even more.
The average national rent in October stood at $2,009 a month, down slightly from September but still 3.3% higher than a year ago.

Homes under construction in Englewood Cliffs, New Jersey on Nov. 19th, 2024.
Adam Jeffery | CNBC

If President-elect Donald Trump is going to push inflation back down to a more tolerable level, he will need help from housing costs, an area where federal policymakers have only a limited amount of influence.
The November consumer price index report contained mixed news on the shelter front, which accounts for one-third of the closely followed inflation index.

On one hand, the category posted its smallest full-year increase since February 2022. Moreover, two key rent-related components within the measure saw their smallest monthly gains in more than three years.
But on the other hand, the annual rise was still 4.7%, a level that, excluding the Covid era, was last seen in mid-1991 when CPI inflation was running around 5%. Housing contributed about 40% of the monthly increase in the price gauge, according to the Bureau of Labor Statistics, more than food costs.
With the CPI annual rate now nudging up to 2.7% — 3.3% when excluding food and energy — it’s not clear that inflation is consistently and convincingly headed back to the Federal Reserve’s 2% goal, at least not until housing inflation eases even more.
“It would be expected that over time, we would start to see year-over-year slower growth in rents,” said Lisa Sturtevant, chief economist at Bright MLS, a Maryland-based listing service that covers six states and Washington, D.C. “It just feels like it’s taking a long time, though.”

Still rising but not as fast

Indeed, housing inflation has been on a slow, uneven trek lower since peaking in March 2023. Much like the overall CPI, shelter components continue to rise, though at a slower pace.

The housing issue has been caused by ongoing cycle of supply outstripping demand, a condition that began in the early days of Covid and which has yet to be resolved. Housing supply in November was about 17% below its level five years ago, according to Realtor.com.
Rents have been a particular focus for policymakers, and the news there also has been mixed.
The average national rent in October stood at $2,009 a month, down slightly from September but still 3.3% higher than a year ago, according to real estate market site Zillow. Rents over the past four years are up some 30% nationally.
Looking at housing, costs also continue to climb, a condition exacerbated by high interest rates that the Federal Reserve is trying to lower.

Though the central bank has cut its benchmark borrowing rate by three-quarters of a percentage point since September, and is expected to knock off another quarter point next week, the typical 30-year mortgage rate actually has climbed about as much as the Fed has cut during the same time frame.
All of the converging factors post a potential threat to Trump, whose policies otherwise, such as tax breaks and tariffs, are projected by some economists to add to the inflation quandary.
“We know that some of the president-elect’s proposed initiatives are quite inflationary, so I think the prospects for continued progress towards 2% are less sure than they might have been six months ago,” Sturtevant said. “I don’t feel like I’ve been compelled by anything in particular that suggests that targeting the supply issue is something that the federal government can meaningfully do, certainly not in the short term.”

Optimism for now

During the presidential campaign, Trump made deregulation a cornerstone of his economic platform, and that could spill into the housing market by opening up federal land for construction and generally lowering barriers for homebuilders. Trump also has been a strong proponent for lower interest rates, though monetary policy is largely out of his purview.
The Trump transition team did not respond to a request for comment.
The mood on Wall Street was generally upbeat about the housing picture.
“Rents may finally be normalizing to levels consistent with 2% inflation,” Bank of America economist Stephen Juneau said in a note. The November housing data “will be viewed as encouraging at the Fed,” wrote economist Krushna Guha, head of central bank strategy at Evercore ISI.
Still, shelter expenses “continue to be the number one source for higher prices, and that the rate of increase has slowed is no comfort,” said Robert Frick, corporate economist at Navy Federal Credit Union.
That could cause trouble for Trump, who faces a potential Catch-22 that will make easing the housing burden difficult to solve.
“We’re not going to drop rates until shelter costs come down. But shelter can’t come down until rates are lower,” Sturtevant said. “We know that there are some wild cards out there that we might not have been talking about two or three months ago.” More

The US Treasury building in Washington, DC, US, on Tuesday, Aug. 15, 2023.
Nathan Howard | Bloomberg | Getty Images

The U.S. budget deficit swelled in November, putting fiscal 2025 already at a much faster pace than a year ago when the shortfall topped $1.8 trillion, the Treasury Department reported Wednesday.
For the month, the deficit totaled $366.8 billion, 17% higher than November 2023 and taking the total for the first two months of the fiscal year more than 64% higher than the same period a year ago on an unadjusted basis.

The increase came despite receipts that totaled $301.8 billion, about $27 billion more than last November. Outlays totaled $668.5 billion, or nearly $80 billion more from a year ago.
The increase in red ink brought the national debt to $36.1 trillion as the month drew to a close.
On an adjusted basis, the deficit was $286 billion and has totaled $544 billion year to date, an increase of 19%.
Though the Fed has enacted two rate cuts since September totaling three-quarters of a percentage point, interest expenses continue to be a big contributor to the deficit. Net interest expenses totaled $79 billion on the month and are now at $160 billion for the fiscal year, outpacing all other outlays except Social Security, Medicare, defense and health care.
The Treasury Department expects to pay $1.2 trillion this year in total interest on debt.

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