U.S. household net worth has soared to a nearly sixfold multiple of the country’s gross domestic product.
Why it matters: The past two decades of growth in net worth are mostly due to the appreciation of assets like real estate and equities — not to the accumulation of savings, according to a new report out from McKinsey Global Institute.
- This growth has been supported by loose monetary policy “launched against the backdrop of two massive shocks— the 2008 financial crisis and the COVID-19 pandemic,” the McKinsey analysts write.
Not a coincidence: Net worth levels broke away from historical norms around the time the U.S. began its long-running low-interest-rate policy.
Go deeper: U.S. wages and salaries jump 1.5% in last quarter