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The numbers: Total U.S. household net worth — the value of all assets minus liabilities — jumped by $5.8 trillion to a record $141.7 trillion at the end of June, according to a report from the Federal Reserve released Thursday.
The value of corporate equities rose $3.5 trillion to $47 trillion in the second quarter and the value of real estate rose a record $1.2 trillion to $38.4 trillion, the Fed said in its quarterly report on the financial accounts of the United States.
Balances in currency, checking accounts, savings accounts and money-market funds rose by $200 billion in the second quarter to a record $17 trillion. Cash holdings of households have risen by $4.3 trillion since the beginning of 2020.
Debt: On the liability side, household debt rose at a 7.9% rate in the second quarter, up from a 6.7% rate in the prior three months. That’s the strongest debt growth since before the 2008 financial crisis. There were strong gains in mortgage debt and consumer credit, including credit cards and auto loans.
Businesses tightened their belts in the second quarter. Total domestic nonfinancial company debt rose at a 1.4% annual pace, down from a 4.3% rate in the first quarter.
Federal government debt increased at a 9.6% annual rate in the second quarter, up from a 9% rate in the prior three months. State and local government debt expanded at a 3.2% annual rate.
Domestic financial debt rose at a 6.2% rate, up slightly from a 6% gain in the prior quarter.
Big picture: Many economists think that consumer spending will stay strong through next year given how much cash households have saved up. But the data don’t break down how much of the savings is held by wealthy individuals, who have a much lower proclivity to spend. As of the first quarter, the highest earning 20% of households owned $11.3 trillion in cash-equivalent liquid assets. The data on the distribution of wealth in the second quarter will be released in about two weeks.
Market reaction: Stocks
DJIA,
SPX,
were sharply higher on Thursday as investors were relieved the Fed didn’t announce a tapering plan after their policy meeting.
