By: Michlle Smith
December 16, 2013
Americans continue getting richer and household wealth has hit a record high, according to data from the Federal Reserve.
The third quarter marked the eighth consecutive quarterly increase in household net worth, and Americans’ riches jumped 2.6 percent, reaching $77.26 trillion, the Los Angeles Times reported.
In nominal terms, Americans’ wealth is at a record high. But Yahoo Daily Ticker hosts Aaron Task and Lauren Lyster cited surprise at the news that Americans are now richer than ever, asking “really?”
“A third of Americans believe we’re still in a recession and 39 percent say the national economy is getting worse,” Task notes.
Sarcastically, Lyster says she can’t imagine why. Household net worth is now back to 2007 levels, “meaning before the Great Recession.”
But the hosts suggest some Americans’ perception of economic conditions may be shaped by other records this nation can lay claim to, such as having 47 million people on food stamps.
Or perhaps it’s the mountains of consumer debt. Besides mortgages, Americans owe more for credit cards, auto loans and student loans.
In fact, student loan debt is now over $1 trillion, which is another record, the Daily Ticker hosts point out.
After the recession, consumers began deleveraging, but data suggest the tides may be turning.
Household debt increased at an annualized rate of 3 percent in the third quarter to $13.1 trillion. That was the sharpest run up since the first quarter of 2008, Reuters reports.
Some of Americans’ sour sentiment and mounting debt may stem from wages, which have stagnated, says Lyster.
As of October, median household income was down over 6 percent from December 2007, according to Sentier Research.
Meanwhile during the third quarter, companies’ cash piles grew to $1.93 trillion, from $1.81 trillion three months before, Reuters says the data show.
But Americans don’t necessarily need better wages to get richer. According to the Fed, Americans’ big wealth increase last quarter was due in large part to the housing recovery.
However, many missed out on that opportunity because they were renting. The number of renters increased to 35 percent last year, notes the Daily Ticker hosts.
And half of those renters now spend 30 percent or more of their stagnant income paying rent, which is a 12 percent increase from a decade ago, Task and Lyster note.
The other major contributor of Americans’ growing riches was the soaring stock market. The Dow Jones Industrial Average has also reached record levels, Lyster argues.
“Oh, and by the way, it’s the richest 10 percent of U.S. households that own about 80 percent of stocks. Really,” she adds.
But nonetheless, the nation is swimming in wealth, record amounts of it.
“So for the almost 11 million Americans without a job, and the 8 million more who work part-time and wish they had a full-time job, just remember to thank the wealthiest among us for helping America achieve this new milestone,” says Task.