United State’s household wealth increase during the third quarter for about $1.2 trillion as shares prices climbed in response to a recovering economy. According to the report from the Federal Reserve’s Flow of Funds, net worth for non-profit groups and household wealth increased for about 9.1 percent annual rate to $54.9 trillion following the 9.9 percent decline during the last three months.
Falling debts and rising wealth are putting consumers towards improving their individual finances after the worst recession in the country since the 1930’s, which is a huge factor why consumer spending climbed up.
But, household wealth remains low by the pre-recession standard, despite the increase.
For a tenth consecutive quarter, majority of American families are cutting their debt.
Economist also improved their projection for recovery on along with the evidence of recovering consumer spending, as well as sustained factory growth.According to a chief economist from New York, household wealth are still recovering and still getting comfortable with the recent market.
The Commerce Department data shows consumer spending climbed during the third quarter to 2.8 percent annual rate, which is the fastest growth rate for the last four years.
Consumer debt during the third quarter has also dropped by 1.7 percent annual rate, the smallest decline during the first three months of last year. Most Americans has been cutting debt to cope up with an increasing unemployment rate, which stayed above 9 percent level for about two years.
Household wealth increased to $1.2 trillion during the third quarter from the $1.4 trillion decline in the second quarter. However, household wealth is still 17 percent below its peak during the first half of 2007.