Stock market surge lifts household wealth

WASHINGTON — The stock market’s rise to record levels fueled a big increase in U.S. household wealth in the final three months of last year. The wealth gains could lead to more spending that would lift the economy, but the increases aren’t widely shared.

Americans’ stock and mutual fund portfolios jumped $728 billion in value in the October-December quarter, the Federal Reserve said Thursday. Home values rose $557 billion.

Total household wealth increased 2.3 percent to $92.8 trillion. The figure includes checking and savings accounts, and subtracts mortgages and other debt,

Still, not all Americans are reaping the gains. The wealthiest 10 percent of Americans own 80 percent of the stock market. And younger Americans are less likely to be homeowners than previous generations, as renting increased in the wake of the housing bubble. They have missed out on the rebound in home prices that began in 2012.

Typically, an increase in household wealth can boost overall spending and help accelerate growth. By some estimates, Americans spend three to five cents for every dollar of additional wealth, what economists call the “wealth effect.” Yet with wealth gains more concentrated among richer and older households, who are less likely to spend more, that effect may be limited.

The wealthiest 1 percent held 42 percent of the nation’s wealth in 2012, the latest data available, according to research published earlier this year by economists Emmanuel Saez and Gabriel Zucman of the University of California-Berkeley.