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US household wealth rises to record high, Federal Reserve say

The Federal Reserve reported on Thursday that U.S. household wealth reached a record high of $141.7 trillion in the second quarter of 2021.

That was a $5 trillion increase on the first quarter of 2021, when U.S. household wealth was at roughly $136 trillion. Compared to the second quarter of 2021, when the COVID-19 pandemic was beginning, U.S. household wealth has jumped $31 trillion.

According to CNBC, an increase in real estate values and stocks boosted U.S. wealth — contributing $3.5 trillion and $1.2 trillion  respectively.

While wealth is growing for some, the report also signaled an increase in borrowing and debt.

U.S. consumer credit grew at an annual rate of 8.6 percent in the second quarter of 2021, up from 3.6 percent from the first quarter, while consumer debt was growing at an annual rate of 7.9 percent in the second quarter, compared to 6.7 percent in the first quarter.

The government also borrowed more, seeing a 9.6 percent increase, the largest since it launched a stimulus program as the pandemic hit hard in the second quarter of 2020. 

The data comes as several federal financial supports and unemployment benefits petered out earlier this year, including a weekly $300 supplement provided through Federal Pandemic Unemployment Compensation. 

The U.S. has not been seeing the type of job growth that economists expected following the country’s vaccination rollout. In August, only 235,000 new jobs were added to the economy, short of the 750,000 jobs economists expected, which was blamed in part to the delta variant spread and COVID-19 cases. 

Much of the wealth accumulated in the U.S. since the pandemic began has gone to the richest parts of society.

Between March 2020 and April 2021, the combined wealth of U.S. billionaires increased by $1.6 trillion, a 55 percent increase, according to one analysis.

Total wealth of the bottom 50 percent may have grown slightly compared to the richest 1 percent, however. According to Bloomberg, total wealth of the bottom half in the first quarter of 2020 amounted to 6.3 percent of that of the top 1 percent, up from 5.8 percent at the end of 2019.