Monday, June 27, 2022
Home Business Household net worth rises above $141 trillion, but debt up sharply as...

Household net worth rises above $141 trillion, but debt up sharply as well

Residential single family homes construction by KB Home are shown under construction in the community of Valley Center, California, U.S. June 3, 2021.

Mike Blake | Reuters

American households saw another significant jump in net worth as well as hefty increases in debt and credit, the Federal Reserve reported Thursday.

Thanks in good part to a big jump in stock market earnings, total household net worth rose to $141.7 trillion through the second quarter of 2021, the central bank’s Financial Accounts of the United States report showed.

That was good for a $5.85 trillion increase, or 4.3% from the first quarter. Looking back to a year ago, when the nation was in the early days of the Covid-19 pandemic, the net worth total represents a 19.6% increase.

A large chunk of the new wealth came from stocks, which accounted for $3.5 trillion of the gain, while real estate appreciation was responsible for $1.2 trillion.

However, along with that increase came a big surge in debt.

Consumers debt totaled $17.3 trillion as of June 30, a quarterly gain of 7.9%. Consumer credit grew at an annual pace of 8.6%, while mortgage debt was up 8%.

Household debt mirrored that of the federal government, which ended the quarter owning $28.5 trillion after a 9.6% increase. That was the largest percentage gain since the second quarter of 2020 as the government launched an aggressive stimulus program to pull the economy out of the pandemic. State and local government debt increased 3.1%, a slowdown from the 3.5% pace in the first quarter.

Nonfinancial business debt grew much more slowly, rising just 1.4% to $18 trillion.

Total nonfinancial debt outstanding across all sectors was $63.3 trillion, a quarterly increase of 6.4%, down from the 6.7% rise in the first quarter.

Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign up to start a free trial today.

Source link



Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Recent Comments