RICHISH

Americans’ wealth hits an all-time high, but don’t look at their bank accounts

Thursday, September 14, 2023 by Snacks

My money don’t jiggle jiggle… it’s invested in a 3-bedroom. Fresh federal data shows that last quarter US household wealth hit a non-inflation-adjusted record, ballooning to $154T+. Net worth climbed as Americans’ stock holdings soared by $2.6T and the value of their real estate popped $2.5T. Behind the surge: booming tech stocks and a housing market that seems to be quickly recovering from the Fed’s rate-hike crusade. But it’s not all rainbows and dollar bills…

Bounced checks… and trips to the dollar store. While household wealth has climbed, this week the Census Bureau said that inflation-adjusted median income in the US slipped last year (for the third year straight) to just over $74K. For many it means purchasing power (aka how far your $$ goes) actually declined, despite rising wages. It’s a potentially stubborn trend, as yesterday’s CPI data showed that inflation ticked up last month. 

  • Maxed out: Americans’ credit-card debt passed a record $1T last quarter, pushing overall household debt to over $17T. 

  • Piggy-bank cracks: The savings rate fell to 3.5% in July, down from 4.3% in June — a month when more than 60% of US adults lived check to check. 

  • Struggling: The US poverty rate had the largest annual jump on record last year, while the child-poverty rate more than doubled to 12.4%.

THE TAKEAWAY

Wealth’s more than net worth… This year’s market gains and resilient real-estate prices have provided padding against inflation’s toll. While wealth and wages are up, many still feel they’re falling short: according to a recent survey, Americans say they need $233K/year to feel financially secure, and last month consumer sentiment ticked down.

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