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U.S. Households Continue To Increase Net Worth

English: Chart of the components of United Sta...

English: Chart of the components of United States public and private debt since 1945 as a fraction of GDP. (Photo credit: Wikipedia)

U.S. Households Continue To Increase Net Worth

The Federal Reserve releases its "Financial Accounts of the United States" report every quarter. In simple terms, it gauges the net worth of U.S. households and organizations not seeking profits. According to the report, net worth of this segment rose 1.3 trillion dollar in the second quarter. Home prices and rising stocks explain this much needed growth.

Despite a sluggish recovery, housing markets across the nation are improving. Even the hardest hit areas are seeing remarkable gains. Most markets still haven't reached the values seen before the onset of the recession, though. Unfortunately, it could take years to each those levels once again. Any improvement is welcome for homeowners that saw their wealth disappear overnight.

Stocks have been performing ridiculously well since 2009, too. In fact, various indexes reached historic highs only recently. Investors have been overwhelmingly bullish in spite of poor economic news. Without a doubt, stocks are a huge driving force behind the economic recovery.

Plus, United States households are borrowing money once again. Consumer borrowing and spending continues to rise steadily. Americans are more inclined than before to spend their money or borrow funds to finance purchases. Fortunately, households are saving more money than in the past, too. All of these factors add up for some bright news.

Of course, the U.S. economy won't fully recover from the recession anytime soon. Such data is skewed by the fact that richer households invest in stocks. Poorer households rely upon their property for value. Therefore, poor home prices affect far more people than stock performance. Either way, increased home prices and strong market performances are helping the economy recover steadily.

American Household Net Worth and Discretionary Spending

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