A survey released by the Federal Reserve on Wednesday showed that in the years following the outbreak of the pandemic, the wealth of American households experienced the most significant surge on record, with both wealthy and impoverished households experiencing a general increase in wealth.
According to the triennial Consumer Financial Survey report released by the Federal Reserve, the median net worth of US households adjusted for inflation increased by 37% from 2019 to 2022. This is the largest increase since the survey began in 1989. The increase in housing prices and stock prices over the past three years has far exceeded the inflation rate, thereby boosting the growth of net assets of American households.
Federal Reserve economists have stated that wealth growth has a broad foundation in population and socio-economic groups, partially reflecting that middle-income and low-income households were more likely to own stocks and housing last year than in 2019.
During the pandemic, consumers gained significant economic benefits from the prosperity of the real estate and stock markets, government fiscal stimulus policies, and more time at home. This helps explain why even after the Federal Reserve raised interest rates to a 22-year high, consumers are still spending recklessly, and high inflation remains an unavoidable "old dilemma" for Federal Reserve officials.
Of course, strong consumer spending has also raised hopes for the US economy to avoid recession.
Leo Feler, chief economist of market research firm Numerator, said that elderly Americans in the United States have particularly benefited from the appreciation of housing and the rise of the stock market. He pointed out that this means they no longer need to worry too much about whether they have saved enough funds for the future.
This is the real situation we see. Elderly people live well and they go out to consume, "Feler pointed out.
Other groups have also achieved significant wealth growth. The median increase in net assets of black households was the highest, with their wealth increasing by 60% from 2019 to 2022. The economic benefits of the African American community stand in stark contrast to their long and slow recovery after the 2007-09 financial crisis.
Of course, the huge gap between rich and poor still exists. The median net worth of black households in 2022 was $44900, still lower than other ethnic groups. In the same year, the median net worth of white households was $285000, while the median net worth of Hispanic households was $61600. It is worth mentioning that the median net worth of Asian households is as high as $536000 (measured separately for the first time in this year's survey).
From 2018 to 2021, the median pre tax income slightly increased by 3% after adjusting for inflation. The income growth of high-income individuals is the largest, which means that inequality has expanded.
Overall, this survey is consistent with other recent data from the Federal Reserve and the Census Bureau. These data show that the trend of wealth and income concentration formed since the 1980s is rebounding at the beginning of the post pandemic era.