A man walks along a street in a neighborhood of single-family homes in Los Angeles, California on July 30, 2021.
Frederic J. Brown | AFP | Getty Images
US households experienced another significant jump in net worth as well as sharp increases in debt and credit, the Federal Reserve said on Thursday.
Thanks to a large jump in stock market earnings, household total wealth rose to $ 141.7 trillion through the second quarter of 2021, the report from the US Federal Reserve’s financial accounts showed.
That was good for an increase of $ 5.85 trillion or 4.3% from the first quarter. Looking back at a year ago, when the nation was in the early days of the Covid-19 pandemic, the net worth represents an increase of 19.6%.
Much of the new wealth came from stocks that accounted for $ 3.5 trillion in gains, while real estate appreciation accounted for $ 1.2 trillion.
But at the same time with this increase came a large increase in debt.
Consumer debt was $ 17.3 trillion per year. June 30, a quarterly gain of 7.9%. Consumer credit grew at an annual rate of 8.6%, while mortgage debt increased by 8%.
Household debt reflected the federal government, which ended the quarter with $ 28.5 trillion after a 9.6% increase. It was the largest percentage gain since the second quarter of 2020, when the government launched an aggressive stimulus program to pull the economy out of the pandemic. Central and local government debt increased 3.1%, down from 3.5% in the first quarter.
Non-financial corporate debt grew much more slowly, rising only 1.4% to $ 18 trillion.
The total outstanding non-financial debt across all sectors was $ 63.3 trillion, a quarterly increase of 6.4%, down from the increase of 6.7% in the first quarter.
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