Economics, Pethokoukis

US net worth has recovered $13.5 trillion, but still below 2007 peak


Ed Yardeni:

By the way, the Fed’s latest Flow of Funds data show that the net worth of US households recovered by $1.7 trillion to $65 trillion during Q3. It is still below the record high of $67 trillion during Q3-2007, but up $13.5 trillion since its recent cyclical low during Q1-2009. Leading the way higher during Q3 was a jump of $387 billion in owners’ equity in household real estate. Rising to record highs were households’ pension fund reserves ($14 trillion) and mutual fund holdings ($5.5 trillion, excluding money market funds).

One thought on “US net worth has recovered $13.5 trillion, but still below 2007 peak

  1. If you stick one foot in 110 degree water and the other in 35 degree water, are you comfortable on average? By ignoring who holds which assets, Mr. P commits similar statistical abuse, By whom, I don’t mean classes but age. In the normal course of events, home equity is the first building block of household wealth, not because young families have excess cash but rather because they need a place to live. In happy times, they move on to retirement savings/pension assets, business equity, and ultimately, aftertax investments.

    Now look at which age group took the major hit in the recession: Unsurprisingly, it was the 35-44 YO cadre that is stretching budgets to pay for kids, schools, houses and cars.

    The least affected is my age group, and here lies the bottom line: We don’t buy much. Got too much stuff already. Got stuff the average 40 YO will never have, like regular pension checks. The people buying clothes, appliances, food, bigger houses and bigger cars are the people who saw half of their household wealth disappear in the period 2005-10.

    Once upon a time in America, everyone would consider the housing bust a wrong that should be righted. Well, most everyone anyway.

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