At the end of March, the wealth of U.S. households jumped to a record $136.9 trillion, according to a Federal Reserve report on Thursday, suggesting plenty of dry tinder for economic growth as the Coronavirus pandemic recedes and the nation reopens.
Rising equity markets drove the overall increase in wealth and added $3.2 trillion to domestic assets in the first quarter. A growing market for the real estate industry was about $1 trillion according to the latest quarterly report on household, business and government financial accounts by the U.S. central bank.
From the fourth quarter to the extent that it has increased, household wealth is expected to be $5 billion.
In the first quarter, the balances of cash, checking accounts and savings deposits swelled to a record $14.5 trillion, showed the report, bolstered by massive government aid designed to blunt the economic fallout from the pandemic and bridging families to the other side of the crisis.
The Fed report provides overall figures and does not shed light on the large differences between poor families and higher incomes, and those with jobs and those without.
It emphasizes the extra expenditure power to be effective for Americans overall this quarter and beyond as COVID 19 cases continue to down and newly vaccinated Americans venture out and states lift their remaining pandemic restrictions. Economists project GDP growth in 2012 as the fastest in decades.
The resurgence in economy, coupled with bottlenecks for key materials such as semiconductors and widespread reports of companies that are unable to fill jobs, is pushing inflation upwards though Fed officials expect that to be temporary.
Higher bank account balances reflected the $600 checks, signed in June by most Americans under a pandemic aid package, as well as the bulk of the $1,400 checks that were part of President Joe Biden's relief package in March.
The combined aid of the two packages totaled $2.8 trillion and included money for small businesses and local governments, as well as $300 in weekly assistance for the unemployed, though anything disbursed after March won't show up until the next quarter report of the Fed.
The report showed that overall household debt accelerated in the fourth quarter at an annualized rate of 6.5% compared to a 6.2% increase in the first quarter, as home mortgage lending climbed up again. As of March 31, borrowers held $11 trillion in home mortgages.
Non-corporate borrowing accelerated to a 4.4% Federal rate, up from a 1.1% rate in the previous quarter, reflecting an increase in financial bonds, said the Fed.
Government borrowing at a 2.5% annualized rate versus 10.9% in the prior quarter fell. According to you, if you love you, then you should try to call your boss.