Thursday, June 6, 2013
According to the latest figures from the Federal Reserve, the net worth of U.S. households reached a new all-time high of $70.35 trillion as of the end of March 2013. On an inflation-adjusted basis, net worth is about 4% less than its prior peak in 2007, but the recovery has nevertheless been impressive. Since the value of households' real estate holdings fell by $2.7 trillion since 2007, the increase in net worth was driven by $6.2 trillion worth of increased savings, reduced debt, and financial market gains. This is all a testament to the dynamic nature of the U.S. economy, which in turn reflects the ability of businesses, workers, and consumers to overcome adversity and forge ahead.
In my experience, it never pays to underestimate the inherent dynamism of the U.S. economy. It only took four years to recover from the most devastating recession in modern times, and the near-collapse of the global financial system. The recovery has been painfully slow, but there is no reason to think it won't continue.
Posted by Scott Grannis at 9:48 AM