The Federal Reserve reported Thursday that Americans got richer thanks to a boost in their stock market holdings and an increase in real estate values.
For the first time, household net worth surpassed $150 trillion in the fourth quarter, rising at a healthy 8.2% pace from the previous quarter for the fastest growth period since the first quarter of 2020. The $4 trillion increase in holdings from corporate equities and housing was the reason for the increase.
The total level was $150.29 trillion, which was a 14.4% increase from a year ago. The boost came with the U.S. economy growing at its fastest pace since 1984 and the stock market having another strong year.
Despite the increase in debt at all levels, the move came despite it.
Including household debt, nonfinancial debt came to $65.1 trillion, including $18.7 trillion in the business world and $28.6 trillion from the government. Each category saw a rise.
Household debt increased at an 8% annual rate, due to a rise in consumer credit and an increase in mortgages. Federal government debt jumped by 10.8% after declining 1.3% in the third quarter, while nonfinancial business debt increased at a 6.7% clip.
The first quarter numbers are not likely to be as good for net worth.
The stock market has stumbled out of the gate, pressured by runaway inflation and the humanitarian crisis in Ukraine, and the gross domestic product is expected to gain little if anything in the first quarter. Interest rate increases are likely to slow growth further, as stocks are in correction mode and remain volatile.
Consumer prices were up 7.9% from a year ago, while worker wages in inflation-adjusted terms were down.
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