Millennials are killing countless industries - but the Fed says it's mostly just because they're poor

• Millennial spending habits have wreaked havoc on companies from golf equipment makers to razor manufacturers.
• However, a new paper from the Federal Reserve argues that millennials are similar to earlier generations except for one factor: they have much less money than Gen X and Baby Boomers had when they were young.
• "Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth," the report reads. "Conditional on their age and other factors, millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations."

Millennials have been blamed for killing plenty of industries. But, according to the Federal Reserve, it's not their fault.

"A new Federal Reserve paper says the app-loving, participation-trophy-receiving cohort, defined as those born between 1981 and 1997, aren't really different from their parents," Bloomberg's Luke Kawa reports. "They're just poorer than previous generations were at this point in their lives, thanks to a large portion of the group coming of age during the financial crisis."

Differences in spending between millennials and past generations, the Federal Reserve report argues, are not primarily due to "unique tastes and preferences." Instead, authors Christopher Kurz, Geng Li, and Daniel J. Vine point to general technological changes, ongoing demographic evolution, and economic cycles as explanations.

Most significantly, most millennials came of age during the Great Recession, kneecapping their financial well-being in early years of adulthood.

Read more: 'Psychologically scarred' millennials are killing dozens of industries - and it's their parents' fault

"Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth. ... Conditional on their age and other factors, millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations," the report reads.

Average real labor earnings for male household heads working full time were 18% and 27% higher for Generation X and Baby Boomers when they were young compared to millennials. For young female heads of household, the difference is smaller - 12% for Gen X and 24% for Boomers - but earlier generations were still making more money when they were younger among similar demographics.

Will millennials' murder spree continue?

Millennials having less money to spend has put pressure on various industries. Millennials are forced to be choosier about what they buy, and certain purchases remain out of reach.

It remains to be seen whether economic recovery will eventually correct these imbalances.

The authors of the Federal Reserve report argue that there is "little evidence that millennial households have tastes and preference for consumption that are lower than those of earlier generations." For example, millennials have started spending similar amounts of money on cars to earlier generations now that they aren't as heavily burdened by the recession.

However, other experts argue that the psychological impact of the Great Recession may linger.

"I think we have got a very significant psychological scar from this great recession," Morgan Stanley analyst Kimberly Greenberger told Business Insider in 2017.

"One in every five households at the time were severely negatively impacted by that event," Greenberger continued. "And, if you think about the children in that house and how the length and depth of that recession really impacted people, I think you have an entire generation with permanently changed spending habits."