Surging stock market powers wealth gains

WASHINGTON — 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 percent to $96.2 trillion in the April-June quarter. Stock portfolios and mutual funds jumped $1.1 trillion. Home values climbed $600 billion.

The solid gain in wealth could make many Americans confident enough to spend more, which typically fuels economic growth. Consumer spending accounts for about 70 percent of U.S. 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 percent of Americans own 80 percent of the nation’s stock market value. And the wealthiest 1 percent held 42 percent 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.

Meanwhile, housing is the main wealth accumulation vehicle for the middle class. Home prices have climbed sharply since 2012, but in much of the country they still lag behind pre-recession levels.

Total household wealth includes checking and savings accounts, and subtracts mortgages and other debt.

The Fed’s data comes after the Census Bureau reported last week that middle-class families enjoyed solid income gains in 2016.

RICHARD DREW / AP Specialist Anthony Rinaldi works on the floor of the New York Stock Exchange. Wall Street’s success has helped Americans’ net worth to rise 1.8 percent in the April-June quarter.