Household wealth jumped to a record $136.9 trillion at the end of March, a Federal Reserve report showed on Thursday. It was bolstered by massive government assistance to reduce the economic impact from the coronavirus pandemic.
Rising equity markets drove the overall increase of wealth and added $2 billion to households in the first quarter. Rising housing prices are estimated to be around $1 trillion according the U.S. government's latest quarterly report on household, business and real estate assets.
The U.S. household wealth by the fourth quarter averaged $3 trillion.
Balances in cash, checking accounts and savings accounts swelled in the first quarter by roughly $12 billion to a $4 trillion record, according to the report.
The household wealth snapshot suggests that families have extra spending power for the quarter and beyond as COVID-19 cases continue to expand and newly vaccinated Americans venture out and states relieve their remaining pandemic era restrictions.
However, the report did nothing about the huge differences between poor families and smaller ones vs. those with jobs and those without.
Overall, higher bank accounts indicate the $600 checks, which were signed by most Americans under a Pandemic Aid package in late December, as well as the bulk of the $1,400 checks that were part of the relief package of President Joe Biden in March.
The combined aid of the two packages totaled $2.8 trillion, including money for small businesses and local governments, as well as an extra $300 in weekly aid to the unemployed, though anything disbursed after March will not show up until the next quarterly report of the Fed.
The report showed household debt in the first quarter at an annualized rate of 6.5% compared to a 6.2% rise in the fourth quarter when residential mortgage borrowing accelerated, the report showed.
Non-financial business borrowing increased to a 4.4% rate, boosting from the 1.1% rate in the prior quarter.
The government's borrowing rose in the prior quarter at a 10.9% annualized rate versus 6.5% in the last quarter.