U.S. household net worth jumped $1.3 trillion in the spring, fueled by gains in home and stock values.
The Federal Reserve said Wednesday that net worth rose to $74.8 trillion in the April-June quarter, up 1.8 percent from the first quarter. Home prices and stock markets have risen further since then, suggesting that Americans’ net worth is now even higher.
The gains in wealth haven’t been evenly distributed. Home ownership has declined since the recession, particularly among lower-income Americans. And the wealthiest 10 percent of households own about 80 percent of stocks.
Americans’ wealth bottomed at $57.2 trillion in 2008 during the Great Recession. It’s since risen $17.6 trillion.
Household wealth, or net worth, reflects the value of such assets as homes, stocks and bank accounts minus debts such as mortgages and credit cards.
Greater net worth can boost consumers’ willingness and ability to spend. That could accelerate economic growth.
Some economists say higher household wealth enabled Americans to spend more this year despite higher Social Security taxes and higher income taxes on wealthier Americans that took effect at the start of the year.
Home values rose $525 billion in the April-June quarter, and stock and mutual fund portfolios rose $300 billion.
Consumers took on slightly more debt last quarter, with overall household debt rising as a 0.2 percent annual rate, mostly in the form of auto and student loans. Credit card debt rose slightly, too.
Mortgage borrowing decreased at a 1.7 percent pace. Other forms of consumer credit, including auto and student loans, increased at a 5.6 percent pace.
Total non-financial debt rose at a 3.1 percent annual pace last quarter, led by a 6.9 percent increase in business borrowing followed by a 2.5 percent gain in federal debt. State and local government borrowing climbed at a 1.1 percent pace.