Americans' collective net worth reaches record $80 trillion
America, pat yourself on the back: We are all doing better financially than ever before -- according to a report by the Federal Reserve. The report found that the assets of all Americans -- households and non-profits collectively -- have reached a record $80.7 trillion.
Despite stagnant wages and low job growth, our net worth -- the value of homes, stocks and other assets minus debts and other liabilities -- jumped 3.8 percent in the fourth quarter of 2013, up nearly $3 trillion from the prior quarter. For the year as a whole we did even better increasing our wealth 14 percent, or $9.8 trillion compared to the year before. In fact we now have more than earned back all the wealth that vanished in the Great Recession. At the pre-recession peak in 2006 we were worth $68.8 trillion.
This may come as a surprise to most of us who, after looking in the checking account, find it not much better off than the year before. We may even be wondering where did our net-worth go? Well, if you have to ask then you aren't one of the people who have been able to take advantage of the stock market's great performance of late.
The Standard & Poor's 500-stock index, to use one example, rose 10 percent in the fourth quarter alone. It was up 30 percent for the entire year. The increase in the value of directly and indirectly held corporate equities added $5.6 million in worth to those who had them -- mostly people who are already affluent.
Spending has outpaced earning, according to a report from the Commerce Department earlier this week. January saw wages up 0.3 percent after being flat in December. No surprise then that we have borrowed more. According to the Fed, total household debt was up 0.4 percent in the final quarter of 2013, mostly because of auto and student loans.
Collectively the less-affluent are not doing nearly as well as the Fed numbers indicate. A report released in December by economists at Ohio State found the average household net worth is still about 14 percent less than it was before the start of the financial crisis.
