Stocks, property value boom push U.S. wealth to record
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Property values and a strong stock market pushed U.S. household wealth to a record high of $154.28 trillion in the second quarter, Federal Reserve data published Friday showed.
Why it matters: The data solidifies the growing narrative that — at least for now — the U.S. economy is faring far better than its major counterparts (particularly Europe and China.)
- It also underscores how the Fed's aggressive tightening offensive against inflation hasn't driven the economy into a ditch, or curbed voracious consumer demand.
- Households have fully recouped losses suffered last year as the Fed's interest rate hikes took their toll on stocks and the housing market, Reuters notes.
Zoom in: Household net worth rose to $154.3 trillion, up from $148.79 trillion at the end of the first quarter.
- A rally in stocks contributed $2.6 trillion in gains, or nearly half of the increase.
- Rising property values contributed $2.5 trillion.
- Compared to the first quarter of 2022, which set a previous record high of $152.49 trillion, household net worth is up by about 1.2% or $1.8 trillion.
- The calculation is based on the balance sheets of households, businesses, federal, state and local governments.
The big picture: Analyst expectations for a recession continue to shrink, with Goldman Sachs earlier this week lowering its probability for a downturn within the next 12 months to 15% from 20%.
What to watch: Cash holdings are down for a record fifth straight quarter.
- National debt levels for individuals, businesses and governments also continued to rise, driven by federal government debt.
Related story: Big layoffs in higher-paying jobs may be in the rearview mirror
