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Household wealth tops $150 trillion for the first time despite surge in debt

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An inspection of a packet of five-dollar U.S. bills at the Bureau of Engraving and Printing, Washington, March 26, 2015

Reuters| Reuters

Americans were significantly more wealthy as 2021 drew to a close. This was due to both a boost in stock markets and an increase property values, according to the Federal Reserve report Thursday.

In the fourth quarter, the household’s net worth surpassed $150 trillion. It grew at an 8.2% rate compared to the prior quarter. This quarter was the most successful growth period since the beginning of 2020. This was due to an overall $4 trillion increase in housing and corporate equity holdings.

The total level — $150.29 trillion, to be exact — represented a 14.4% increase from a year ago. This was due to the U.S.’s fastest economic growth rate since 1984, and the stock exchange enjoying another strong year.

The decision was made despite rapid increases in debt across all levels.

Nonfinancial total debt reached $65.1 trillion. That includes $17.9 Trillion at the household level and $18.5 Trillion in the business sector. Government borrowed $28.6 T. Each of these categories experienced significant rises.

Due to an 8.9% increase in consumer credit and an 8 percent jump in mortgages, household debt increased at an annual rate of 8%. The nonfinancial corporate debt rose at 6.7%, and the federal government’s debt shot up by 10.8%. After having fallen 1.3% during the third quarter.

It is not likely that the first quarter 2022 numbers will be as positive for net worth.

The first quarter’s gross domestic product will show little to no growth, if any. stock market has stumbled out of the gateThe runaway inflation, as well as a humanitarian and geopolitical crisis in Ukraine have pushed down the stock market. The stock market is in correction and remains volatile. However, interest rate rises ahead are likely to slow down growth.

Figures were revealed Thursday consumer prices up 7.9% from a year agoWorker wages were down 2.6% in inflation adjusted terms.

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