Household net worth increased by $7.6 trillion in the second quarter, surpassing the pre-pandemic high as rebounding stocks bolstered Americans’ wealth, a Federal Reserve report revealed on Monday.
Household net worth increased 6.8 percent to $119 trillion, the largest gain in quarterly records dating back to 1952. Federal government borrowing spiked as lawmakers passed fiscal relief measures, according to the report.
Household net worth saw a record decline in the first quarter as the coronavirus pandemic and shutdowns pushed the economy into a recession. Increasing household net worth is one sign of the nation’s uneven recovery.
While the labor market has continued to struggle, the value of equities increased by $5.7 trillion over the first quarter and real estate grew by $458 billion. The S&P 500 matched pre-pandemic levels in mid-August and has since set new highs.
For the first time in at least four years, consumer credit not including mortgage debt fell in the second quarter. Credit decreased $69 billion as consumers did less credit-card borrowing in light of the pandemic.
In the highest ratio since 1989, businesses owed $1.09 for every $1 in debt owed by households, according to Bloomberg.
As unemployment claims remain high, not all Americans are experiencing relief from the rebound in stocks and housing: Forty-five percent of Americans don’t own equities, while one-third of households don’t own a home, according to a June Gallup poll.