S&P Global — 22 November 2024
Daily Update: November 22, 2024
Aging US Population Leading to Shrinking Labor Pool
By Nathan Hunt
Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy
Absent death, everyone is aging. From a macroeconomic perspective, individual aging is meaningless. It is when we age as a collective that the economics get tricky. Older adults tend to work less, pay less taxes and require more services.
According to a recent demographic analysis by S&P Global Market Intelligence, more than 20% of the US population will be over the age of 65 by 2030. In 2025, approximately 62.7 million Americans will be 65 and older. That number is projected to grow 14.2% by 2030 to about 71.6 million individuals. Meanwhile, the percentage of the population in prime working-age groups will shrink.
This creeping senescence will not be evenly distributed. By 2030, Maine is expected to have the oldest average age at 45.6 years, while Utah will have the youngest at 36.7 years. Texas is projected to have the largest increase in people over the age of 65, comprising 5.4 million individuals by 2030.
Labor, capital and productivity growth are the three components of long-term growth in macroeconomic theory, according to a previous article from S&P Global, “The challenges of aging: Fast and slow.” When a population ages, the supply of labor shrinks, which will negatively impact GDP absent any other changes. Globally, the old-age dependency ratio — the over-65 population relative to the working-age population — will worsen in all countries studied in the article, without exception.
Aging populations require substantial government outlays for social security systems and similar benefits. With more beneficiaries and fewer workers, public finances take a substantial hit. This issue can be solved through structural reforms aimed at raising employment levels for older workers or by front-leading a sustained budgetary consolidation. It is also possible to address the public shortfall by reforming social security and publicly funded healthcare systems. However, such reforms are politically untenable.
According to a 2023 analysis by S&P Global Ratings, the median net general government debt will rise to 101% of GDP in advanced economies and 156% of GDP in emerging economies by 2060. Since nearly all countries face a steep, demographically driven deterioration in public finances, governments may contemplate large, unpopular spending cuts in age-related expenditure items.
Despite an aging population, US demographics look slightly advantageous to European and large Asian economies (excluding India, which possesses a younger population). The primary factor driving the relative American demographic advantage is the larger number of immigrants. However, large-scale immigration has become politically untenable in the US as well.
Today is Friday, November 22, 2024, and here is today’s essential intelligence.
Listen: The Decisive | Episode 22 - Supply Chains for the Energy Transition
Explore the critical intersection of energy transition and supply chains. Our experts discuss how supply chains are essential for transporting vital resources like critical minerals while also managing their own emissions. Delve into the challenges of achieving supply chain resilience amid geopolitical tensions and evolving regulatory landscapes. Understand the importance of enhanced visibility in supply chains and the need for innovative solutions to meet sustainability goals.
—Listen and subscribe to the podcast from S&P Global Market Intelligence
Listen: The Decisive | Episode 23 - The Global Economy: Region by Region
In this episode, S&P Global Market Intelligence’s global economist, Ken Wattret, leads a discussion with economists about the economic landscape. They cover key themes, including moderating inflation, easing monetary policy and the likelihood of a soft landing in the US. They delve into the performance of major economies, with insights on the US labor market, manufacturing sector weaknesses and the implications of China's economic slowdown. The episode also highlights regional forecasts for Europe, Asia Pacific and Latin America, addressing potential risks and the impact of oil prices on inflation.
—Listen and subscribe to the podcast from S&P Global Market Intelligence
Digital Assets Brief: Crypto's Trump Card
US election results will likely shift the legislative and regulatory environment for crypto. With the caveat that campaign rhetoric doesn't always translate into policy actions, these developments may accelerate blockchain innovation in financial markets and could increase predictability for crypto businesses. A proposed bill to build a strategic bitcoin reserve already shifts the narrative for that asset, even if the proposed bill's prospects are unclear.
—Read the article from S&P Global Ratings
India Vannamei Shrimp Exports Drop 17% in September
India's Vannamei shrimp exports dropped 17% on the year and 12% on the month to 41,665 mt in September, data from the Ministry of Commerce showed. Platts, part of S&P Global Commodity Insights, assessed peeled, deveined, tail-on shrimp (PDTO) FCA India, 31-40 count/lb, at $7,414/mt Nov. 19. Vannamei exports to China saw the biggest drop in September, falling 52% on the year and 29% on the month.
—Read the article from S&P Global Commodity Insights
Africa's Refining Resurgence on Course Despite Margin Risk
The threat of a permanent downswing in global refining margins has not stopped African refinery projects from progressing, as amplified energy security concerns have spurred new capacity additions. Postcolonial ambitions to develop Africa's downstream sector have historically been blighted by underinvestment, leaving the continent reliant on imported fuel as small-scale, simple refineries have struggled to turn a profit.
—Read the article from S&P Global Commodity Insights
The Evolution of Electric Vehicle Battery Technology
The lithium-ion battery — now synonymous with electric vehicles (EVs) and available commercially since 1981 — took a while to catch on in automotive circles. The first EV had a lead acid battery and was developed a full 100 years earlier by Gustav Trouvé in 1881. Indeed, by 1900, of the 4,192 vehicles produced in the US that year, 1,575 (38%) were electric. Vehicle speeds were low at that time and a lead acid battery was sufficient to give 100 miles of range. However, as vehicle speeds increased and requirements changed, the lead acid battery was no longer sufficient. EVs quickly fell by the wayside as the internal combustion engine (ICE) dominated.
—Read the article from S&P Global Mobility
CERAWeek 2025 — Moving Ahead: Energy Strategies for a Complex World (March 10-14, 2025 | Houston, Texas)
CERAWeek is comprised of three mutually reinforcing platforms: The Executive Conference, the Innovation Agora and Partner Programs. The industry's foremost thought leaders convene to cultivate relationships and exchange transformative ideas. Our programs are designed to advance new ideas, insight and solutions to the biggest challenges facing the future of energy, the environment and climate.
—Register for the conference from S&P Global