Stocks, property value boom push U.S. wealth to record

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