NEW YORK, July 26, 2026 — A demographic shift is reshaping the global economy, according to a new analysis from JPMorgan that draws on long-term data from the United Nations, the International Monetary Fund, and the Federal Reserve. The report underscores a slower-growing workforce, an aging population, and falling savings rates — trends that together carry significant implications for economic growth and interest rates. The numbers are stark.
The global working-age population grew at roughly 2 percent each year in the 1970s. By 2023, that rate had fallen below 0.5 percent.
The United Nations World Population Prospects shows the global population aged 65 and older is now growing at 3 percent annually. By 2050, one in every six people on the planet will be over 65. This aging trend is not new, but the pace is accelerating.
The labor force participation rate worldwide peaked at 66 percent in 1990. By 2020, it had declined to about 60 percent.
Fewer workers relative to retirees puts pressure on pension systems, healthcare, and the broader economy. On the savings side, the picture is similarly sobering. Global gross savings as a share of GDP reached a high of roughly 27 percent in 2006.
By 2022, that figure had fallen to about 25 percent, according to IMF data. In the United States, the national savings rate — net of depreciation — has been below 5 percent of GDP every year since 2010. Lower savings can reduce the pool of capital available for investment, which in turn affects long-term growth potential.
What this means for interest rates
The Federal Reserve’s estimate of the so-called neutral rate of interest — the rate that neither stimulates nor restricts the economy, often called r* — has been downgraded over time. The Fed’s own estimate dropped from 2.5 percent in 2012 to just 0.5 percent in 2020. But JPMorgan now expects r* to rise by 1 to 2 percentage points over the next decade, bringing it closer to a range of 1.5 to 2.5 percent.
That matters because the neutral rate is a benchmark for monetary policy. If it rises, the Fed may need to keep interest rates higher than in recent years to keep the economy balanced.
The 10-year U.S. Treasury yield offers a telling historical comparison: it averaged 5.6 percent in the 1990s, 4.5 percent in the 2000s, 2.5 percent in the 2010s, and stood around 4 percent in 2024. The report does not predict a return to the high-rate environment of the 1990s, but it does suggest that the ultra-low rate period of the 2010s may be behind us.
A global pattern with local consequences
These are not abstract trends. Countries are already feeling the effects of aging populations and shrinking workforces. The United States is not immune.
The decline in domestic savings and the slowing growth of the working-age population will test policymakers in the years ahead. Early findings from demographic researchers suggest that these shifts are structural, not cyclical.
That means they will not reverse on their own. Countries will need to adapt through immigration policy, labor market reforms, and changes to retirement systems. What to watch next: the extent to which these long-term demographic forces influence central bank decisions, government budgets, and global capital flows.
For investors and policymakers alike, the message from JPMorgan’s report is clear — the world is getting older, and the economics of that change are still being written.
Sources
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