(Bloomberg) — Household wealth in the U.S. increased from October through December by the most in a year as stock prices advanced to an all-time high at the end of 2014.
Net worth for households and non-profit groups rose by
Record stock prices and steadily increasing home values have made U.S. households wealthier as the economic expansion lumbered on. While faster job growth and low fuel prices also have helped lower-income households, bigger wage gains will strengthen balance sheets further.
“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,” said
The value of financial assets, including stocks and pension fund holdings, held by American households increased by
Though the housing market has made fitful progress over the past year, the improving jobs picture may boost prospects for growth in the industry, which would in turn bolster household wealth. Household real-estate assets climbed by
The pace at which improving economic activity translates into greater household wealth is something Fed policy makers are keeping an eye on as they consider raising interest rates for the first time since 2006.
Employers added 295,000 workers to payrolls in February as the unemployment rate fell to an almost seven-year low of 5.5%, a
Meanwhile, wages have been slower to accelerate, with average hourly earnings climbing just 0.1% in February from the month before. They rose 2% in the past year, matching the average for the recovery.
Household debt increased at a 2.7% annual rate in the fourth quarter, Thursday’s Fed report showed. Mortgage borrowing rose at a 0.7% pace for a second straight quarter. Other forms of consumer credit, including auto and student loans, slowed to a 6% pace, the weakest in a year.
Total non-financial debt increased at a 4.7% annual pace last quarter, the most in two years. Federal government obligations rose by 5.4%, while business borrowing climbed 7.2%. State and local government debt advanced at a 1.1% pace.
|Copyright:||(c) 2015 Financial Planning. All rights Reserved.|
|Source:||Source Media, Inc.|