U.S. Households’ Net Worth Hits Record $123.5 Trillion As Stocks Boom, But Debt Is Also Surging

Topline

While unemployment has remained stubbornly above pre-pandemic levels, record highs in the stock market have pushed the net worth of all households in the U.S. to a new high, despite the fast growth in household debt.

Key Facts

Crucial Quote 

“We’ve seen home prices rise, market prices for tradable instruments rise and savings increase… but those gains skew to upper income people,” KPMG Chief Economist Constance Hunter told the Wall Street Journal. “It’s a vicious cycle,” she added of the pandemic’s disparate impact on lower-income Americans. “Not only are lower-income households more impacted, they also are less likely to have the resources to draw upon to support their families.”

Key Background

The S&P 500 jumped 8% in the third quarter, while the tech-heavy Nasdaq Composite soared nearly 12%, and both have reached record highs in the fourth quarter–as has the Dow Jones Industrial Average. But far from everyone benefits from those gains. According to a Gallup poll in March and April, just 22% of Americans making less than $40,000 annually said they owned any stocks, compared to 84% of people making at least $100,000 per year.

Tangent

There were 10.9 million unemployed people in the country last month, when the U.S. economy added a much lower-than-expected 245,000 jobs, according to data released by the Bureau of Labor Statistics last week. The number of unemployed people in the U.S. remains more than three times higher than it was before the pandemic, during which 22 million Americans have been forced into unemployment.

Further Reading

U.S. Household Net Worth Hits Record in Third Quarter (WSJ)

Unemployment Claims Spike Again As Covid-19 Spreads And Americans Wait For Federal Relief (Forbes)

10.9 Million Americans Are Still Unemployed—Rate Ticks Down To 6.7%, But Job Market Could Take Years To Recover (Forbes)