WASHINGTON (AP) – Americans’ household wealth jumped in the final three months of last year, pushed higher by rising stock prices and greater home values. That leaves many households, particularly wealthy ones, with more money to spend – a potential boost to economic growth.
The Federal Reserve said Thursday that U.S. household net worth increased 1.9 percent in the fourth quarter to $86.8 trillion, up from $85.2 trillion in the third quarter. Americans’ stock and mutual fund portfolios grew $758 billion. Home values rose $458 billion.
The overall increase in wealth masks large disparities between richer and less well-off households. And the Fed’s figures aren’t adjusted for population growth or inflation.
Household wealth, or net worth, reflects the value of homes, stocks and other assets minus mortgages, credit card debt and other borrowing.
Some of the gains have likely reversed in the past couple of months. The stock market, as measured by the Standard & Poor’s 500 index, closed Wednesday 2.7 percent below its level at the beginning of the year. Home prices, however, have continued to rise.