SalesGlobe Signals is about seeing a bigger, macro view on growth and taking actions that will help you reach your growth aspirations. This month let’s look at some Signals on the supply side of the housing market.

In Signals, our focus is on helping executives answer two questions for their businesses:

1. What Are the Market Signals? Indicators you might watch for your business that may signal what's ahead.
2. What Does This Mean for Profitable Revenue Growth? Based on the signals, how you may think about growth and the actions you may consider.

What Are the Market Signals?

America’s baby bust is structural, not temporary, and it’s already reshaping markets. We talk about the economy in terms of GDP, interest rates, and trade balances. But underneath those measures is a more fundamental force: the number of people in the economy. That number, specifically the number of young people entering it, is declining in ways that will reshape demand, labor markets, federal budgets, and entire industries for the next 30 years. As I learned about in demographics class back in business school, this is a story about the pig moving through the python. Much like the aging of the Baby Boomers, the movement is real and predictable, and we can either plan for it or ignore it. Either way, it will eventually arrive. Let’s look at the Signals.

Signal 1. The U.S. Birth Rate Has Fallen Below the Replacement Rate and Keeps Falling.

Every healthy population requires a total fertility rate, the average number of births per woman over her lifetime, of about 2.1 to replace itself without relying on immigration. In the twenty years before the 2007–2009 recession, the U.S. averaged a total fertility rate of 2.02, hovering just below that threshold. That rate peaked at 2.12 in 2007, the last time the U.S. came close to replacement.

Since then, the decline has been steep and uninterrupted. The total fertility rate fell to 1.64 in 2020 and 1.60 in 2024. Maybe people took that social distancing a bit too far. This is an all-time record low according to final data from the CDC’s National Center for Health Statistics. The Congressional Budget Office projects the total fertility rate will fall further, to 1.58 in 2026 and 1.53 by 2036, where it is expected to plateau. Put simply, American women are having roughly one-quarter fewer children than needed to maintain the population.

Why is this happening? Unfortunately, the causes are structural, not temporary. Rising housing costs are responsible for an estimated 51% of the TFR decline between the 2000s and 2010s. For more on that, see our SalesGlobe Signals issues on Housing Affordability and the 50 Year Mortgage. Homes have become structurally less affordable, delaying household formation. As I explored in our issue on the 50-year mortgage, the first-time homeowner is now a 40-year-old.

Childcare costs rose 43% in real terms between 2009 and 2019. The average age of first birth has shifted from the late 20s to the early 30s, compressing the window for larger families. And an increasing share of young Americans are simply choosing to have fewer children or none at all, citing the cost of raising them, career priorities, and oddly, a sense that the world they would be born into is more uncertain than it once was. I remember hearing that last one back in the 70s when I was a kid.

The pandemic added an additional wrinkle. While initial predictions called for a baby bust of 300,000 or more missing births, the actual shortfall was closer to 97,000, with a modest rebound in 2021. But the pandemic did accelerate one trend that suppresses birth rates: young adults moving back home with their parents. Today, roughly one in three adults ages 18 to 34 lives with a parent, a rate not seen since 1940. When a 28-year-old is sharing a home with their parents, it may cramp their courting style.

The Census Bureau’s most recent population estimates confirm the ground-level reality. The U.S. added about 3.6 million babies in 2025, which is better than the prior year’s decline of 40,700, but that renewed connecting wasn’t enough to stop the birthrate. The U.S. population grew just 0.5% in the 12 months ended June 30, 2025, roughly half the pace of the prior period, with natural increase (births minus deaths) contributing only about 519,000 to that growth.

What Does This Mean for Profitable Revenue Growth? The fertility decline is not a news story about someday. It is already embedded in the age structure of the U.S. population and the size of future consumer cohorts. Children born in 2007, which is the peak birth year, are 18 today, the largest entering college class ever. Children born in 2023 will be that age in 2041, and there are 16% fewer of them.

For companies whose revenue depends on child or youth consumers, such as baby products, formula, toys, children’s clothing, pediatric healthcare, K–12 education, and youth team sports, the market is structurally shrinking in the United States. The strategic response is not to ignore it but to plan. Premiumization, generating more revenue per child, is one path. With the aging Baby Boomers as grandparents, as I mentioned earlier, and as one of the wealthiest cohorts on record, there’s plenty of funding to spoil the grandkids. Geographic expansion toward higher-birth-rate markets internationally is another. And, the fastest-growing consumer of what were once kids’ products is adults. Maybe all the pickleball companies we see popping up and marketing to the active adult market had some foresight.

For companies in sectors less directly tied to children, the fertility decline still matters through its effect on labor supply, workforce composition, consumer spending patterns, and the long-run fiscal health of Social Security and Medicare. All of which affect your customers’ ability and willingness to spend.

Signal 2. Population Growth is Slowing, and Geography Matters.

Not all of the U.S. demographic story is about birth rates. Population growth also depends on where people move and, crucially, on immigration. The latest Census Bureau data, covering the 12 months ended June 30, 2025, reveals a country dividing sharply along geographic lines, with the South and parts of the Mountain West continuing to grow while the coasts and some of the Midwest continue to slow or decline.

The impact of immigration is huge. Net international migration fell 54% in the 12 months ended June 2025, from 2.7 million to 1.3 million, as immigration enforcement and deportation efforts accelerated. That single change cut the national growth rate in half. Every state saw less net immigration compared with the prior year. And it tipped the most-populous state, California, into a slight population loss of about 9,500 people, the first time in many years that immigration did not compensate for California’s large domestic out-migration of roughly 230,000 people per year. Basically, people are leaving California and immigration has historically been offsetting the leavers.

Within the U.S., domestic migration continues to favor the South. Texas added 391,000 people in the most recent 12-month period, North Carolina added 146,000, South Carolina added 80,000, and Tennessee added 64,000. North Carolina had the highest net domestic in-migration of any state with an increase of 84,000. South Carolina was the nation’s fastest-growing state by percentage at 1.5%. Not coincidentally, we looked at similar patterns in our SalesGlobe Signals issue on housing supply.

Florida, long the dominant domestic migration destination, saw its gain collapse from 310,000 in 2022 to just 22,500 in 2025. The expensive Miami area has shed population, and the dream of retiring to Florida has faded for many middle-class Americans priced out of the market.

The Midwest is one surprise. All 12 Midwest states grew in the most recent period, and the region saw its first positive net domestic migration gain in years, helped by affordable housing in cities like Columbus, Indianapolis, and Omaha. Ohio, Minnesota, and Michigan all shifted from net population losers to net gainers.

The longer-term projection from the CBO is more sobering. Population growth will slow from an average of 0.3% annually over the next decade to just 0.1% annually from 2037 to 2056. The total population is projected to stop growing in 2056, reaching about 364 million, and begin shrinking after that.

What Does This Mean for Profitable Revenue Growth? Geography has always mattered for market strategy, but the divergence in population growth is becoming so pronounced that it should be a direct input to your revenue model. Companies that have historically deployed sales resources, distribution infrastructure, and marketing spend based on population need to update those models. The South and Mountain West are growing while the coastal metros are stagnating or declining. The Midwest is quietly re-emerging as an affordable-housing-driven growth story.

If your business depends on household formation, for example financial services, home goods, appliances, insurance, construction, the growth is concentrated in the Carolinas, Texas, Tennessee, Georgia, Utah, and Arizona, not in California or New York. If your business depends on a growing labor pool, the same geography applies. And if you serve companies that serve these end markets, follow the population.

Immigration policy uncertainty adds a layer of risk. For companies that depend on immigrant labor supply, immigrant consumer segments, or markets powered by immigration-driven household formation, the 54% drop in net immigration in 2025 is a material signal to begin planning for a prolonged period of reduced immigration.

Signal 3. America is Getting Older Faster, and the Age Pyramid has Inverted.

In 2005, the largest single decade-group in the U.S. population was Americans in their 40s, the Baby Boomers in their peak earning years. Today, the largest group is Americans in their 30s, the Millennials, and the fastest-growing group is Americans in their 60s, back to the Baby Boomers. The population of Americans aged 60 to 69 grew by 15 million people in just two decades. Meanwhile, the population under 10 years of age shrank in absolute terms.

So, while the pig is moving through the python, the age pyramid is also inverting… kind of a double move. In 2005, Americans 65 and older made up 12.4% of the population. Today they represent 18%, 61.2 million people, up from 36.8 million twenty years ago. With that, the median age has risen from about 36.2 in 2005 to 39.1 in 2024, which is a record high. In 11 states, older adults now outnumber children entirely. So, one-fifth of our states have more older people than younger people. That was true of just 3 states in 2020.

What Does This Mean for Profitable Revenue Growth? The aging of America is both a challenge and the largest consumer market opportunity of the next generation. The challenge is a fiscal one. As more Americans exit the workforce and become eligible for Social Security and Medicare, the drag on public finances and the constraints on discretionary spending in the economy will grow. The opportunity is the 61 million Americans 65 and older who collectively control 51% of U.S. household wealth, approximately $78 trillion, and who are entering their highest-spending years on healthcare, travel, housing modification, and experiences.

For companies in healthcare, the shift from pediatric demand to geriatric demand is already happening. The same hospitals that are closing maternity wards are expanding cardiology, oncology, and memory care units. Home healthcare is projected to grow 7.4% annually through 2032. The senior living market will nearly double from $944 billion today to $1.3 trillion by 2033.

For companies outside of healthcare, the action is to understand what share of our customer base is under 40, and what happens to our demand as that cohort ages. For some businesses, like financial planning, travel, and home modification, there may be a benefit from aging consumers. For others, the youth market shrinkage is a direct revenue headwind that requires new thinking to navigate.

Signal 4. Immigration Was a Major Tributary and It’s Down to a Trickle.

For the past two decades, immigration has been filling the population deficit that the birth rate could not. Between 2021 and 2024, net immigration averaged over two million per year, offsetting the shrinking natural population increase and fueling labor force growth. Foreign-born workers accounted for 88% of U.S. labor force growth over the past five years (albeit in certain labor segments) and today represent 19.2% of the civilian labor force.

Now that stream of labor has dwindled. The CBO estimates that net immigration declined to approximately 410,000 in 2025, down from over three million two years prior, which is a drop of nearly 90% from the recent peak. Policy changes under the current administration got control over border enforcement, expanded deportations, cut refugee admissions to their lowest level since 1980. While much of the southern border immigration was likely manual laborers, on the other end of the labor pyramid, new fees on skilled worker visas are also driving that decline. As a result, every state saw less net immigration in 2025 compared to the prior year.

What Does This Mean for Profitable Revenue Growth? Immigration has been a structural growth driver for the U.S. economy in ways that are often under-appreciated. Immigrants account for a disproportionate share of entrepreneurship. As an example, 46% of Fortune 500 companies were founded by immigrants or their children. They are younger on average than the native-born population, filling the labor force gaps created by an aging domestic workforce. And immigrant households are a growing consumer segment across industries from housing to consumer goods to financial services.

A sustained reduction in immigration affects different businesses in different ways. Companies that rely on immigrant service labor, such as agriculture, construction, hospitality, healthcare, face accelerating labor shortages and upward wage pressure. Companies that serve immigrant consumer segments in high-immigration markets like California, Texas, New York, and Florida will see that demand moderate. And companies that have been counting on population growth to drive volume growth need to revisit those assumptions.

The policy environment is the key variable to watch. If immigration normalizes toward historical levels over the next few years, much of this is a manageable transition. If restrictions remain at or near current levels for an extended period, the economic consequences, slower labor force growth, faster population aging, and an earlier onset of population decline, become more significant.

Signal 5. The U.S. is Not Alone. The World’s Developed Economies Are in the Same Situation, and Some Have Already Seen the Future.

The U.S. fertility decline may sound like an American problem, but it’s actually a lifecycle stage for industrialized economies. Ray Dalio, in his book, The Changing World Order,  describes the predictable evolution of countries from low cost, frugal net producers creating goods and services the world wants to prosperous consumers sourcing goods and services from the low-cost countries. With this prosperity comes an increase in education and healthcare, a decrease in infant mortality, and an increase in longevity. Some of the results are declining birth rates, an inverted population pyramid, and increasing federal debt resulting from consuming more than the country produces. Apologies to Mr. Dalio if I oversimplified some points from over 500 pages. If you haven’t read the book, you should, because it’s a sobering look at where we may be headed and some facts that you cannot ignore. is in fact a near-universal phenomenon across industrialized economies.

The Organization for Economic Cooperation and Development (comprised of 38 industrialized countries) has average total fertility rate of approximately 1.43, and virtually every wealthy country is below the replacement rate. What makes this particularly worth examining is that several countries are significantly further along the demographic curve than the United States, giving us a preview of what a decade or two of sub-replacement fertility looks like in practice.

South Korea offers the most extreme case. Its total fertility rate dropped to 0.72 in 2023, the lowest ever recorded for any country, before ticking up slightly to 0.75 in 2024, the first increase in nine years. The government has spent more than $270 billion on programs to increase birth rates over 16 years, including cash baby bonuses, childcare subsidies, state-sponsored dating services, and a dedicated Ministry for Population Strategy. The total fertility rate continued to fall throughout. Like many government programs, some of which I’ve commented on in other issues, economic and cultural forces driving the fertility decline are more powerful than programs. Academic research found that over 74% of South Korea’s baby bonus payments went to births that would have happened anyway.

Japan is further along than South Korea and represents the closest thing to a long-run case study. Japan has been below the replacement rate since 1974, more than 50 years. Its population peaked at 128.5 million in 2010 and has since fallen to about 123.8 million. In 2024, Japan recorded 912,000 more deaths than births. Annual births fell below 700,000 for the first time. The working-age population peaked in 1995 and has since declined by about 15 million people.

The economic consequences are well-documented and sobering. Japan’s decline in working-age population accounts for nearly all of its economic underperformance over the last three decades, according to IMF analysis. The dependency ratio of seniors relative to working adults  is the highest in the world, a big inverted population pyramid. One-third of Japanese construction workers are over 55. Rural towns are emptying out, leaving behind millions of abandoned homes.  In the consumer market, the most telling data point gets to the bottom of it… adult diapers outsold baby diapers in Japan for the first time in 2015 and have continued to do so ever since.

No country has successfully reversed a sub-replacement fertility trend through policy alone. France, with the most generous family support system in Europe, maintained a total fertility rate near 2.0 for decades but has since seen it fall to 1.68. Hungary invested up to 6% of GDP in pro-natalist subsidies and achieved a temporary uptick, but fertility has since returned toward its baseline.

What Does This Mean for Profitable Revenue Growth? The international comparison matters for U.S. businesses in two ways. First, it tells us where the U.S. is going. Japan and South Korea are not cautionary tales about bad policy. They are structural previews (parallel demographic pigs moving through pythons) of what extended sub-replacement fertility produces in economies with limited immigration. The U.S. is buffered by higher immigration and a relatively higher fertility rate than East Asia or Southern Europe, but the trajectory is the same direction.

Second, international markets represent the growth opportunity that domestic demographics cannot. The U.S. baby products, toy, and children’s education markets are all structurally shrinking. The fastest-growing markets for these categories are in India, Southeast Asia, and Sub-Saharan Africa, where birth rates remain above replacement and the middle class is expanding. For companies with the capability to expand internationally, the demographic math makes a strong case for doing so sooner rather than later.

Signal 6. The Youth Population Cliff is Cascading Through Every Institution and Companies Need to Adapt.

The drop in births that began after 2007 is not something that can be ignored by businesses, or they’ll be left to react when the implications are upon them. The birth decline is a concrete, quantifiable decline in the number of children moving through each stage of life and every institution that serves young people is already feeling or about to feel it.

Elementary schools were the first to feel it. U.S. public school enrollment fell by 1.4 million students between fall 2019 and fall 2020, which was accelerated by the pandemic but rooted in the birth rate decline that preceded it. Kindergarten enrollment was down 5% in 2022 to 2023 compared with 2019 to 2020. California is in its eighth consecutive year of declining K–12 enrollment, and projected to lose another 586,000 students by 2035. West Virginia has closed 53 schools since 2019.

Higher education is next. According to the Western Interstate Commission for Higher Education’s most recent “Knocking at the College Door” report, 2025 represents the peak year for U.S. high school graduates at approximately 3.9 million. After 2025, a steady decline is projected through 2041, bringing that number down by roughly 13%. Like most demographics, this is not demographic speculation, but reality. The children who will be 18 in 2041 were already born in 2023.

The financial stress on colleges is already visible. In 2024 alone, 28 degree-granting institutions closed. Since 2020, over 100 colleges have closed or merged. For example, Penn State closed 7 of its 20 branch campuses. The College of Saint Rose, over 100 years old, closed in December 2024. Birmingham-Southern, founded in 1956, closed the same year. The schools most at risk are small, private, tuition-dependent institutions in the Northeast and Midwest, exactly the geography losing population to the South and Mountain West. Some schools are aggressively recruiting international students to fill the gap. International enrollment at U.S. universities stood at a record 1.18 million in 2024. However, visa policy uncertainty has already caused a projected 17% drop in new international student enrollment in the most recent period.

Youth sports tells a similar story. Regular participation among boys ages 6 to 17 dropped from 50% in 2013 to 41% in 2023. The number of sports that children participate in has fallen 13% since 2019. Baseball participation for ages 6 to 12 is down 19% since 2007, a direct reflection of the birth rate decline from that same year. Little League enrollment that peaked near 3 million in the 1990s has been declining ever since.

In the consumer market, companies are responding. Procter & Gamble entered the adult incontinence market in 2014 with its Always Discreet brand, explicitly recognizing that its Pampers franchise faced structural headwinds. Kimberly-Clark, maker of Huggies, cut 5,000 jobs in 2018, with its CEO stating, “You can’t encourage moms to use more diapers in a developed market where the babies aren’t being born.” In the toy industry, adults are now the fastest-growing consumer. In the first quarter of 2024, shoppers 18 and older spent $1.8 billion on toys, surpassing the preschool segment for the first time. LEGO doubled its revenue over the past decade largely by targeting adult sets. Hasbro now generates over 60% of its revenue from consumers 13 and older. Carter’s, the largest U.S. children’s clothing brand, has seen revenue decline 17% from its 2019 peak and announced the closure of 150 stores in 2025.

What Does This Mean for Profitable Revenue Growth? The cascading effect of the birth rate decline through institutions and markets is the central business story of the next decade. Let’s look at some implications by industry.

Baby and Children’s Products. Companies in diapers, formula, baby food, infant gear, and children’s apparel face a shrinking domestic addressable market driven by fewer births and fewer children per family. The strategic responses are well-established and include premiumizing offers to capture more revenue per child (Grandpa just might buy AJ that $400 bat), expanding internationally into higher-birth-rate markets (Asia-Pacific represents 43% of the global baby products market), and considering adjacent shifts to adult markets where manufacturing or distribution capabilities translate.

Toys and Games. The kidult revolution is real and is likely permanent. Adults now represent 28% of all global toy spending and are growing faster than child segments. If your customer base includes toy companies or the retailers that sell to them, understanding the shift in their consumer mix, from children toward teens and adults, is essential to understanding their future revenue trajectory and product strategy. Case in point is the youth sports industry, traditionally focusing on equipment and uniforms for school team sports. Some of these companies are making shifts into new markets that include adult club sports and, of course, pickleball.

K–12 Education and Private Schools. Private K–12 schools in declining-enrollment regions face both a student pipeline problem and a competitive pressure problem. As public schools lose enrollment, they have more resources per remaining student if funding levels remain constant, which can increase their perceived value vs. private schools. Schools in growth regions, particularly the South and Mountain West, face the opposite situation. They have growing demand with potentially insufficient capacity. Sounds like the same situation for some of the same states as the housing supply we looked at in our previous issues. If your business serves educational institutions, geography is the most important variable.

Higher Education. Colleges and universities are at an inflection point. The peak high school graduating class was 2025; every class after will be smaller for 15 years. Institutions dependent on traditional 18 to 22-year-old students will face enrollment pressure, financial stress, and consolidation pressure. The institutions best positioned are those with strong brands (which will see more competition for a smaller pool), those in growth states with increasing high school graduates (The South grew 3% while the Northeast projected a 17% decline by 2041), and those aggressively building adult learner, workforce development, and online programs to serve non-traditional students.

Healthcare. The shift from pediatric to geriatric demand is structural and accelerating. Maternity wards are closing; geriatric, memory care, and rehabilitation capacity is expanding. For healthcare companies, equipment manufacturers, and technology providers, the demographic signal is clear: the patient of the future is older.

Financial Services. Declining birth rates and delayed household formation affect mortgage demand, life insurance, college savings products, and wealth accumulation. At the same time, the wealth transfer from the Baby Boomer generation, estimated at $84 trillion over the next 20 years, represents one of the largest financial services opportunities ever. Companies that are positioned to serve this intergenerational transfer, through estate planning, trust services, and next-generation wealth management, are well placed.

Ten Questions About Your Customer Strategy for a Declining Youth Population

To set your direction, here are ten questions you may ask your organization:

1. How dependent is our current revenue on products, services, or markets that are primarily driven by children, youth, or young adults under 25, and what does a 13 to 16% reduction in that cohort over the next 15 years mean for our top line?
2. Are we planning for volume growth in our youth-facing segments based on historical rates, or have we stress-tested our demand forecasts against the demographic projections that are already locked in by births that have already occurred?
3. What share of our total addressable market shifts to the aging demographic as Baby Boomers move through their 60s, 70s, and 80s, and are we positioned to capture it?
4. If our domestic birth-rate-sensitive market is structurally declining, which international markets offer the birth-rate and middle-class growth that could offset that decline, and do we have the capabilities to compete there? From football to, cricket anyone?
5. What adjacent “adult” markets exist for our products or capabilities that would allow us to follow the demographic shift as Pampers has done with adult incontinence and Hasbro has done with adult gaming?
6. How exposed are we to immigration-dependent labor supply, consumer demand, or market growth, and how are we scenario-planning for a prolonged period of reduced immigration?
7. If our business serves educational institutions, K–12 or higher education, how are we tracking enrollment trends in our specific geographic markets, and are we prepared for the institutional consolidation that is likely to accelerate in the next decade?
8. For our B2B customers in youth-facing industries, how are we helping them think through their own demographic transition, and are we positioning our offers as solutions to their shrinking customer base or just riding the same wave downward with them?
9. What signals will we monitor, for example birth rates by geography, school enrollment trends, college closure rates, immigration policy developments, to maintain visibility on this trend, and who in our organization is accountable for acting on them?
10. If the CBO’s projection holds and the U.S. population begins shrinking after 2056, how does our long-range plan, including capital allocation, market expansion, and talent strategy, need to change to account for a smaller, older America?

Your Call to Action

Demographics are the most predictable of macroeconomic forces. Unlike interest rates, exchange rates, or consumer sentiment, the number of 18-year-olds in 2041 is not a forecast. Ceteris paribus with respect to mortality, it is a demographic certainty. Those children were already born. The question is not whether the youth population will decline in the United States; it will. The question is whether your organization sees it coming early enough to respond strategically rather than reactively.

Look at each of the signals we’ve discussed: the fertility rate at a record low of 1.60, the birth cohorts 16% smaller than their 2007 peak, the age pyramid inverting, immigration declining, and companies in youth-facing markets already pivoting to adult consumers. Then consider their impact from two perspectives: How will they affect your customers and their ability to grow? How will they affect your business?

Get beyond current state and ask your team where they see the signals projecting ahead and what this means for your organization's profitable growth. Consider each of the questions I've asked, add your own, create a plan, and get into action. Questions for us? Email us at info@salesglobe.com or contact us at SalesGlobe.com.