WSJ: Household Wealth Rose in Years Before Pandemic, Fed Says
Wall Street Journal
Household Wealth Rose in Years Before Pandemic, Fed Says
By Harriet Torry
Sept. 28, 2020
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U.S. families’ income and wealth rose in the years heading into the coronavirus pandemic, with those in lower-income and lower-wealth categories reaping relatively large gains, the Federal Reserve said in a report on household finances.
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The data suggest households were on a relatively solid financial footing headed into the coronavirus pandemic. The pandemic triggered an initial shock that hurt all aspects of the economy, including income, but government stimulus, recent improvement in the labor market and enhanced unemployment benefits have helped prop up household finances.
The most recent Commerce Department data for July show that Americans’ personal income was higher that month than in February, just before the pandemic. Household spending in July was lower than in February and Americans saved nearly 18% of their disposable personal income, more than double the rate in February.
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The distribution of wealth between low- and high-income households narrowed slightly in the latest survey period, Fed economists said, a shift from the 2010-to-2016 period when incomes largely stagnated for all but the most well-off after the 2007-2009 recession.
Families in the lowest two income groups recorded large percentage increases in median net worth, suggesting the decade long expansion benefited a wide swath of society. Net worth rose 37% to $9,800 for the lowest earners, and increased 40% to $44,000 for the second-lowest group…
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