Surging stock market powers US wealth to US$96 trillion
A healthy gain in the stock market and steadily increasing home prices boosted Americans' household wealth this spring, a trend that likely adds to the nation's inequality.
The Federal Reserve said Thursday that Americans' net worth rose 1.8 per cent to US$96.2 trillion in the April-June quarter. Stock portfolios and mutual funds jumped US$1.1 trillion. Home values climbed US$600 billion.
The solid gain in wealth could make many Americans more confident and spend more, which typically fuels economic growth. Consumer spending accounts for about 70 per cent of US economic activity.
But the increases in wealth aren't widely shared, which many economists worry limits its economic benefit. Wealthier Americans are less likely to spend additional income and wealth gains.
Roughly 10 per cent of Americans own 80 per cent of the nation's stock market value. And the wealthiest one per cent held 42 per cent of the nation's wealth in 2012, the latest data available, according to research by economists Emmanuel Saez and Gabriel Zucman of the University of California-Berkeley.
The Fed's data comes after the Census Bureau report released last week showed that income inequality is worsening.
The wealthiest five per cent of US households received 22.6 per cent of all income last year, Census said. That's up from 21.9 per cent two years earlier.