A report by the Federal Reserve (the US central bank) showed that the wealth of Americans rose in the second quarter of this year to 163.8 trillion dollars, an unprecedented level, thanks to the increase in real estate prices as well as gains in the stock market.
The increase in household and nonprofit net worth—which reached $161 trillion at the end of the first quarter—was largely due to a $1.8 trillion increase in the value of real estate holdings and a $700 billion gain in the value of stock holdings.
Meanwhile, household debt rose at an annual rate of 3.2%, the fastest since the third quarter of 2022.
The report also indicated that corporate sector debt rose by 3.8% year-on-year in the second quarter, compared to a 4% increase in the first quarter.
The report also showed that cash in circulation declined slightly, with total balances in banks, money market funds and foreign currency holdings reaching $18.44 trillion at the end of June, down from a record high of $18.51 trillion at the end of March.
The latest data on the financial conditions of American families comes less than a week before the US Federal Reserve meets, during which it is expected to decide to cut interest rates for the first time since the recession caused by the Corona pandemic.
Policymakers are expected to take the step as inflation slows and in the hope of preventing the labor market from slowing further and pushing the economy into recession.
The stock market ended the second quarter near record highs, with the benchmark S&P 500 index delivering a total return of 4.3%, including reinvested dividends.
