Are you feeling richer these days?
Well, the government says you should be. Sort of. It reports that the net worth of U.S. households jumped $3 trillion dollars in this year’s first quarter to $70.3 trillion.
That’s the highest overall value since records began in 1945. But it’s not the highest in real, or inflation-adjusted terms. That peak came in the third quarter of 2007, just before the financial crisis hit. Today’s net worth is still 6 percent below that number when inflation is figured in.
Still, the rebound is wealth is good news. Household debt is under better control, and house and stock market values have recovered very nicely. Stocks have more than doubled since 2009.
This added wealth should help bolster an economy that is still growing only slowly. All other things being equal, the rise should raise consumer confidence and, in theory, encourage spending. That would offset, in part, reduced spending by governments—federal, state and local.
Trouble is, the rebound in wealth is not evenly distributed. For example, less-affluent households own little stock and are less likely to own their own homes. In fact, roughly 5 percent of U.S. households own 90 percent of stocks and stock funds.
So when stock and house values rise, not all households benefit. As the wealth tide goes up, it mostly lifts the boats of the already affluent.
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