U.S. wealth rises, but many peo­ple still trail ’07 peak

Chicago Tribune - - BUSINESS -

Surg­ing stock prices and in­creases in home val­ues pow­ered Amer­i­can house­hold wealth to $96.9 tril­lion this fall.

The Fed­eral Re­serve said Thurs­day that U.S. net worth rose $1.7 tril­lion in the July-Septem­ber quar­ter, ex­tend­ing a steady up­ward march in Amer­i­can wealth af­ter the Great Re­ces­sion elim­i­nated about one-sixth of it in 2008.

U.S. wealth has made a re­mark­able come­back since the re­ces­sion, when it plum­meted more than $10 tril­lion.

But Ed­ward Wolff, an econ­o­mist at New York Uni­ver­sity, uses other Fed data to cal­cu­late fig­ures for av­er­age and me­dian house­holds. In 2016, the lat­est fig­ures avail­able, me­dian house­hold wealth was still 34 per­cent be­low its pre-re­ces­sion 2007 level.

Points to know:

The Fed’s lat­est fig­ures come as Congress is con­sid­er­ing a tax cut plan that would re­duce taxes on cor­po­ra­tions and would mostly ben­e­fit wealth­ier tax­pay­ers.

Op­po­nents of the cor­po­rate tax cut ar­gue that com­pa­nies’ huge cash stock­piles — which have grown nearly 16 per­cent since 2015 — demon­strate that busi­nesses al­ready have the money they need to in­vest.

Just 10 per­cent of the wealth­i­est house­holds owned 84 per­cent of the value of Amer­i­can stocks in 2016, Wolff ’s re­search shows.

While av­er­age house­hold wealth reached $667,600 in 2016, net worth for the me­dian house­hold was just $78,100.

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