The financial condition of U.S. households continued to improve in the first quarter, according to recent data released by the Federal Reserve. The net worth of households increased by nearly $5 trillion, or 3.8%, from the previous quarter to a record of $136.9 trillion, according to the data. On a year-ago basis, U.S. household net worth increased by $25.5 trillion, or 22.9%.
While this stunning growth has been magnified by comparisons to the low levels of a year ago, the rebound still highlights the significant impact of accommodative monetary and fiscal policies in helping the economy recover.
But a deeper look at the data reveals a more nuanced picture. It’s true that significant increases in household financial assets, driven by improving equity values, and nonfinancial assets, driven by rising home prices, more than offset a nominal increase in household debt.
But not all households have benefited equally. Those who own their home and have money invested in the markets have benefited. But for those who do not, the feeling of being further left behind only grows.
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