In the past decade, U.S. Hispanic purchasing power has posted a compound annual growth rate of 7.5 percent, compared with just 2.8 percent for total U.S. disposable income, according to HispanTelligence, the research arm of Hispanic Business. This trend is expected to continue in 2006 and beyond.
Reasons for the relatively faster growth of the U.S. Hispanic market (and marketers' interest in it) are that:
•The Hispanic population, and particularly the U.S.-born portion of it, is growing faster than the population overall. Census data predict there will be more than 43.0 million Hispanics in the U.S. in 2006, comprising 14.4 percent of the total population, up from 35.4 million in 2000.
•Additionally, generations 2 and 3 are growing faster than generation 1, and will represent at least two-thirds of a 60-million-strong U.S. Hispanic population by 2010. They, and even generation "1.5" – those who arrived in the U.S. before age five, as defined by the marketing research firm New American Dimensions – are making strides in educational attainment and occupational status, thereby increasing their income and purchasing power.
•The Hispanic population is younger and includes proportionately more wage-earning members of the workforce than the overall population.
•Further, Hispanics are the nation's most entrepreneurial population. "New firms are the dominant source of job growth," according to the latest Kauffman Index of Entrepreneurial Activity, and 0.48 percent of the adult U.S. Hispanic population was starting a new business each month as of 2004, compared with 0.39 percent of the non-Hispanic white population and lower rates for other key minorities. The index, developed by the Kauffman Foundation, reports than an average of 550,000 new businesses are created in the U.S. each month.
•As a result, as indicated by labor market data released January 6, 2006, Hispanics captured one in every three new jobs created in the U.S. in 2005 (more than 30 percent of new jobs, though they make up 14 percent of the population).
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