This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Household wealth in the U.S. accelerated in the third quarter, driven by higher financial assets and real-estate values, figures from the Federal Reserve in Washington showed Thursday.
Key points:
- Net worth for households and non-profit groups rose by $1.59 trillion, or 1.8 percent, to a record $90.2 trillion in July through September from the previous three months, according to Fed's financial accounts report, previously known as flow of funds survey.
- Value of financial assets, including stocks and pension fund holdings, rose $1.16 trillion.
- Household real-estate assets climbed by $499 billion; owner's equity as a share of total real-estate holdings increased to 57.3 percent from 56.8 percent.
Big picture:
Stock market gains, including a 3.3 percent advance in the S&P 500 Index in the third quarter, and household wealth due to rising house prices, have strengthened household finances. Meanwhile, companies had a record $2.1 trillion in liquid assets, indicating businesses have plenty of wherewithal to boost outlays on capital investment, dividends and stock buybacks.
The details:
- Household debt increased at a 4 percent annual rate last quarter after a 4.3 percent pace in the second quarter.
- Mortgage borrowing advanced at a 2.9 percent pace; other forms of consumer credit, including auto and student loans, climbed at a 7.5 percent rate, which was the most since 2Q 2015.
- Total non-financial debt grew at a 5.8 percent annual pace after 4.3 percent in the previous three-month period.
- Federal government obligations expanded 8.2 percent, state and local government debt advanced at a 0.8 percent pace, while business borrowing increased 6 percent.