The net worth of American households recovered to pre-pandemic levels in the second quarter, according to the Federal Reserve.
Their total net worth rose to $119 trillion in the second quarter as assets jumped to $135 trillion — the same levels that had prevailed in the fourth quarter — as investments in stocks and real estate increased gained more than $7 trillion in value from the first quarter, according to the Fed’s latest report on Americans’ financial accounts.
Households’ equity holdings grew by $5.7 trillion as the stock market recovered almost all its first-quarter losses, while the value of their real estate gained $500 billion.
At the same time, household debt increased just slightly, at a 0.5% annual rate, the lowest quarterly increase for at least two years, as mortgage debt increased at an annual 3% rate while consumer credit shrank by a 6.6% annual rate.
A less rosy picture about the health of U.S. households emerged from another Fed report, released a few days earlier and from Tuesday’s congressional testimony by Fed Chairman Jerome Powell.
The Fed’s report on the Economic Well-Being of U.S. Households, based on a survey of several thousand adults in July, showed that 22% of adults who had been laid off during the pandemic were no longer employed and didn’t expect to return to their old jobs, up from 7% in April.