Household Net Worth Hits Record $86.8 Trillion

The Federal Reserve has released its estimated net worth of households and nonprofits as of the end of 2015. This report does have a look back of course, and the market volatility of the first quarter may have altered the current net worth, if you were taking a live snapshot. It is an election year and that makes the wealth gap and inequality front and center issues. That caveat said, the net worth households and nonprofits rose again.

Thursday’s Federal Reserve report showed that the nation’s net worth of households and nonprofits rose to $86.8 trillion during the fourth quarter of 2015. The value of equities rose by some $758 billion, and the value of real estate rose by some $458 billion.

What is perhaps the most important measure of all things here is that this is another record in household net worth.

Domestic nonfinancial debt outstanding also rose. This was $45.1 trillion at the end of 2015. Household debt was $14.2 trillion. The nonfinancial business debt was $12.8 trillion, and the total government debt was listed as $18.1 trillion. Domestic nonfinancial debt growth was 8.6% (seasonally adjusted) in the fourth quarter of 2015. but that is up from an annual rate of 2.1% in the prior quarter. Also on the debt and credit side:

  • Household debt increased at an annual rate of 3.4% in the fourth quarter of 2015.
  • Consumer credit rose 5.9%, while mortgage debt rose 1.5% outside of charge-offs.
  • Nonfinancial business debt rose at an annual rate of 5.0%.
  • State and local government debt was unchanged in the fourth quarter, down from an annual growth rate of 1.7% in the previous quarter.
  • Federal government debt rose by 18.5% (annualized and seasonally adjusted) in the fourth quarter.

The gain in that federal debt might sound alarming. The Federal Reserve signaled that this was due primarily to the restoration of government trust funds that had been depleted as part of the Treasury’s “extraordinary measures” during the 2015 debt limit impasse.

If you want to see how bad recessions hurt the net worth of the country, a brief note here will show it. The annual net worth reading at year-end prior to the recession peaked at $66.5 trillion in 2007, but it fell $10 trillion by the end of 2008 — and it took until 2012 before recapturing the level. That is seen below:

  • 2006 was $66.073 trillion.
  • 2007 was $66,536 trillion.
  • 2008 was $56.159 trillion.
  • 2009 was $58.066 trillion.
  • 2010 was $62.275 trillion.
  • 2011 was $63.423 trillion.
  • 2012 was $69.579 trillion.

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