GAINESVILLE, Ga.–As economists debate various indicators and what they mean for future economic performance, one analyst is suggesting the markets look to another sign: the number of mothers to be. “Their numbers foretell the strength of the economy,” according to Matt Lampert, director of research at the Socionomics Institute.
“You would think that people would begin to put off having kids after a recession has already begun,” said Lampert. “But the data show that people in the aggregate actually tend to start conceiving fewer children before the onset of recessions.”
While that may sound counterintuitive, Lampert pointed to a National Bureau of Economic Research working paper that showed declines in conceptions preceded the three most recent U.S. recessions. That study confirmed similar work that one of Lampert’s colleagues, Robert Prechter, conducted 19 years ago. Prechter charted data from the U.S. Department of Health and Human
Services and the Dow Jones Industrial Average going all the way back to 1908.
According to Lampert, the data revealed that conceptions tended to rise and fall with the stock market and in fact were especially in sync with the advance-decline line, a measure of stock market breadth.
“Like the stock market, pregnancies are a leading economic indicator, typically sounding the alarm well before the economy contracts,” Lampert says.
According to Lampert, here is how all the factors add up to fewer pregnancies prior to recessions:
- When we’re upbeat, a positive mood prompts feelings of friskiness, daring and confidence. “That inspires people in general to have more children, to send the stock prices higher and to become more productive economically,” Lampert said.
- When we’re downbeat, a negative mood prompts feelings of somberness, defensiveness and fear. “The result is that, overall, people are inclined to have fewer children, to send stock prices lower and to become less productive economically.”
- Why the economy lags the “conception indicator,” people generally can “express their friskiness in their trading accounts and in bed sooner than they can expand or contract business, trends in stocks and conception tend to lead trends in the economy,” said Lampert.