The Federal Reserve said the wealth of U.S. households grew in the fourth quarter of 2014. The net worth for households and non-profits jumped by $1.5 trillion from October through December — a 1.9% increase over the third quarter.
Household and non-profit net worth is now $82.9 trillion.
Breaking it down. The Federal Reserve said record high stock prices and rising home values led the way and is leading the economic expansion being experienced by the United States. Stock value and pension fund holdings rose by $1.2 trillion. All this is leading to faster job growth and when combined with lower fuel prices, lower-income homes are also benefiting.
Or so says Dana Saporta of Credit Suisse Securities. “The recovery is broadening its reach — it’s not just hitting the upper-level of income distribution but starting to help a broader segment of the population, and that’s some good news … credit is flowing much better now.”
A big contributor to the rise is real-estate assets which hit $265.2 billion and owner equity in those assets rose to 54.5% and is up from a flat 54% in the first three quarters of 2014.
On the job front 295,000 workers were added to payrolls and unemployment dipped to a seven-year low at 5.5%. While that appears to be good news, wages didn’t keep up. They rose just 0.1% and are up just 2% in the last year.
Household debt is also rising. It is up by 2.7% in the fourth quarter. Mortgage borrowing rose 0.7% but other forms of consumer credit — auto loans, student loans, etc. — fell to a 6% pace.
That’s the slowest and lowest in a year.
Non-financial debt jumped 4.7% which is the most in two-years. Business borrowing rose 7.2%. Federal debt is up 5.4% and state and local government debt rose 1.1%.
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