The Federal Reserve released a new report this week that found the net worth of American households is now 20 percent higher than it was prior to the financial collapse in 2007. At the second of the quarter this year, households put together were worth $81.5 trillion, up 10 percent from roughly a year ago.
The numbers were not adjusted for inflation, but if the consumer price index (CPI) were incorporated into the calculations then household wealth would still be at a record high: four percent higher than the 2007 net worth levels.
According to the United States central bank, the economic recovery in households across the country has benefited the wealthiest of Americans.
In addition, real estate owned by households is pegged at a value of just under $23 trillion, while equity markets have helped households make considerable gains: U.S. households own roughly $21 trillion in stock and mutual fund shares, 37 percent higher than prior to the Great Recession and 160 percent greater than when the market bottomed out in 2009.
The most affluent own a larger percentage of stock and mutual fund shares.
Another positive in the data is the decline in debt, and not just for households but in various economic sectors, too. Total debt levels for households and non-profit organizations account for three-quarters of the gross domestic product and have reached their lowest level since 2002.
This decrease can be attributed to a reduction in mortgage debt, but consumer debt still remains troublesome, primarily due to student loan debt ($1.3 trillion), auto loans ($919 billion) and credit card debt ($839 billion).
During a speech Thursday, Fed Chair Janet Yellen urged Americans to begin saving again because they are on the brink of a household financial crisis if an unforeseen financial event of $400 arises.
Speaking at a conference sponsored by the Corporation for Enterprise Development, a national non-profit organization that attempts to expand economic opportunity for low-income families, Yellen noted that the U.S. central bank would begin to promote efforts that would encourage Americans to save more and accumulate assets.
