WASHINGTON: For the first time in nearly two years, American households have grown a little wealthier, but they still have a long way to go to recover their losses in the downturn.
Increases in stocks and house prices have driven the 3.9% increase, says a report from the Federal Reserve, along with more savings, fewer borrowings and a reduction of mortgage and credit card debt.
The latest quarterly report showed that household net worth grew to $53.1 trillion (€36.1tn; £32.4tn) in the April-June period, but it was still down almost 19% from the $65.3 trillion peak in the third quarter of 2007, just before the stock market reached its peak.
Improvements in the financial markets have made the biggest contributor to the recovery in UK household finance, with major stock indexes rising more than 50% since March alone.
House prices, says The Fed, have also started rising for the first time since 2006 and are now edging higher in most regions of the country. If the trend continues, householders may be even wealthier in the third quarter.
Overall, says the report, Americans have responded quickly to the recession. After declining by 3.7% in the first quarter, total consumer credit has now fallen by some 6.5%.
Data sourced from Wall Street Journal; additional content by WARC staff