The boom phase of the Federal Reserve induced business cycle is in full gear. It’s more apparent now than ever before, particularly after the United States central bank released a new report highlighting the astronomical amount of wealth U.S. households have.
Due to roaring stock markets, soaring housing prices and labor market manipulation, Americans’ net worth reached a new high in the first quarter of 2015. According to the Fed, when taking into account real estate, stock holdings and other assets, U.S. household net worth is $84.9 trillion, up from $83.3 trillion in the fourth quarter of 2014.
Stock portfolios jumped $487 billion, while home values rose by $503 billion.
Despite the enormous amount of wealth, U.S. households are still wary about borrowing and debt. When calculating auto loans, credit cards, mortgages and other forms of debt, total household debt inched higher by 2.2 percent.
Total household debt accounts for 107 percent of Americans’ after-tax income, slightly down from 108 percent in the October-to-December period. It is up from 90 percent in the 1990s prior to the housing bubble. Total personal debt in the U.S. is just under $17 trillion.
Since the economic collapse, household net worth has gradually been recovering. The financial crisis eliminated about $13 trillion in wealth; total net worth has exceeded the pre-recession peak of $68 trillion.
Leave a Comment