![]() Typical or median wealth thus may show different trends from those for average wealth, which are skewed towards wealthier households. They have had difficulties building up wealth, especially if they did not own real estate or stocks. Yet, many households have continued to struggle throughout the pandemic. This was a larger gain than for households in the second fifth (6.1%), the middle fifth (3.9%), the fourth fifth (5.3%) and the top fifth (5.1%) during that same time. Average inflation-adjusted per household wealth grew by 9.7% from $138,342 at the end of December 2020 to $151,769 in September 2021 for households in the bottom fifth of the income distribution. It is also the highest level on record, dating back to 1952.Īnd, it was not just the highest-income groups that saw wealth gains. This was an increase from 757.5% at the end of 2020. Total household wealth amounted to 795.8% of after-tax income on average in September 2021. Higher stock and housing prices together with additional financial assistance from EIP and CTC checks lifted wealth for many households. It is not just emergency funds that increased during 2021. Household wealth went up at all income levels. Such investments will contribute to faster long-term growth and less inequality. This will require additional legislative actions to boost investments in the most pressing areas such as childcare, health care, education and climate change, among other things. Continued economic growth and faster job creation could ultimately offset those risks. Many households will have to dip into these emergency savings as economic uncertainty persists. The liquid savings of those in the bottom half of the wealth distribution grew by 13.4% in inflation-adjusted terms from $3,565 in December 2020 to $4,042 in September 2021, according to Federal Reserve data. These payments helped struggling families pay their bills, but also build up a financial cushion for future emergencies. Many families with children also got added advanced Child Tax Credit (CTC) payments from July to December 2021. Many families, especially lower-income and moderate-income ones received stimulus checks, officially known as Economic Impact Payments (EIP). Congress provided families with much needed financial relief in the form of direct payments. #ECONOMIX 2021 FULL#The economy will need to retain its momentum well into the spring of 2021 to recover its position before the pandemic, never mind truly full employment akin to the late 1990s. The employed share of those 25 to 54 years old, for example, was still 2.1 percentage points below its level in February 2021. In the meantime, the population has grown and many are still looking for a new job. The economy is still 3.9 million jobs short of where it was in February 2020, the last month before the pandemic. The labor market recovery is not done yet. ![]()
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