Household Wealth Increases for First Time in Two Years
Frank Ahrens, Washington Post
So here’s some actual good economic news, as opposed to the not-as-bad-as-expected economic news I’ve been dealing you lately: For the first time in two years, Americans’ household wealth grew during the spring of this year, the Fed Reserve reported moments ago.
The Fed said household net wealth grew by $2 trillion to $53.1 trillion from April to June of this year.
Naturally, that is directly attributable to the stock market rally since the early March bottom. Look in your own 401(k); you’ve seen it. The Dow and S&P 500 are both up 50 percent and the Nasdaq is up higher.
Overall net worth — which is everything you own: house, car, investments, etc. — rose by 4 percent during the quarter.
It’s worth noting that the $53.1 trillion figure is down from the all-time high of $65.3 trillion recorded in the third quarter of 2007, when the Dow peaked at 14,000. By comparison, the Dow is trading at about 9,800.
Another case of “Figures don’t lie, but liars figure.“
First, your household net worth only grew if you owned stocks.
Somewhere around a quarter of American families own some sort of stocks–in 1990 the figure was 23%.
So, 74% of us are still in the dumper, losing jobs at record pace and losing homes as well, no longer able to send kids to college and on the brink of credit-card default. The wealthy had to get very well indeed for 25% of them to raise the entire household wealth barometer.
Nothing new in that–business as usual.
Yet even in those exalted places, you have to be an extreme optimist to count recovery of $2 trillion from the $12 trillion lost since 2007. Unless my arithmatic fails me once again, the American family is still $10 trillion in the dumper.
Hardly something to trumpet as a ‘wealth increase.’