Baby boomers and millennials are capping growth in the world's biggest economy, Standard & Poor's (S&P) said on Wednesday.
Lengthening lifespans and low fertility rates have led to a steady decline in U.S. population growth over the past 20 years and the proportion of working-age Americans is shrinking, the ratings agency said in a report.
"The share of the population past prime income age is growing as baby boomers age, and the next large pool — the millennial generation (born largely between 1980 and 2000) — is still beginning careers," it said.
S&P said the changing age composition of the population would knock 0.8 percentage points off annual growth over the next eight years. Between 2004 and 2014, demographic changes cut growth by 0.6 percentage points per year, compared with the previous decade.
"As the millennials move closer toward higher spending and earning ages, a boost in their share of consumption will help power the economy forward, easing some — but not all — of the challenges to growth," S&P said.
According to the U.S. Census, millennials (also known as Generation Y) number 83.1 million, representing more than one-quarter of the nation's population. Their number exceeds that of the 75.4 million baby boomers (born roughly between 1945 and 1964).
S&P added that boosting productivity and immigration would help offset some of the demographic challenges. The latter point may prove contentious with the likes of Republican front-runner, Donald Trump, who is virulently in favor of a crackdown in U.S. immigration.