U.S. household net worth jumps to $ 142 trillion

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Numbers: Total U.S. household net worth – the value of all assets minus liabilities – jumped $ 5.8 trillion to a record $ 141.7 trillion in late June, according to a Federal Reserve report released Thursday. .

The value of company shares rose from $ 3.5 trillion to $ 47 trillion in the second quarter and the value of real estate hit a record $ 1.2 trillion to $ 38.4 trillion, said the Fed in its quarterly report on the financial accounts of the United States.

Balances in foreign currencies, checking accounts, savings accounts and money market funds increased by $ 200 billion in the second quarter to a record $ 17 trillion. Household liquidity has increased by $ 4.3 trillion since the start of 2020.

Debt: On the liabilities side, household debt rose 7.9% in the second quarter, against 6.7% the three previous months. This is the strongest growth in debt since before the financial crisis of 2008. Mortgage debt and consumer credit, including credit cards and car loans, have grown strongly.

Businesses tightened their belts in the second quarter. Total domestic debt of non-financial corporations grew at an annual rate of 1.4%, compared to 4.3% in the first quarter.

Federal government debt grew at an annual rate of 9.6% in the second quarter, up from 9% in the previous three months. State and local government debt has grown at an annual rate of 3.2%.

Domestic financial debt increased at a rate of 6.2%, up slightly from a gain of 6% in the previous quarter.

Big picture: Many economists believe consumer spending will remain strong until next year given the money households have saved. But the data does not detail the share of savings held by wealthy people, who have a much lower propensity to spend. In the first quarter, the top 20% of households had $ 11.3 trillion in liquid assets equivalent to cash. The data on the distribution of wealth in the second quarter will be released in about two weeks.

Market reaction: DJIA actions,
+1.80%

SPX,
+1.57%
were significantly higher on Thursday as investors were relieved that the Fed did not announce a reduction plan after their policy meeting.


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