The wealth of US households marked $123.5-T in September as rising stock market and home values and an accumulating of cash defied expectations of a virus-related crash in household finances, according to new data from the Fed Thursday.
The Fed’s latest report on US household, business and government financial accounts covers Q-3.
As of the end of September US households overall held their own.
Rising stocks added $2.8-T to household assets, and rising Real Estate values added $400-B.
Perhaps most notable is balances in cash, checking accounts, and savings deposits rose a combined $473-B to a record $13.4-T, suggesting that any broad spend-down of virus aid benefits had, as of September, not yet begun.
Fed officials and some private economists believe that the pool of excess savings may do more than expected to get families through the chaos, and perhaps turbocharge growth next year as the impact of a vaccine is felt and the pent up demand is released.
The data showed Americans investing aggressively in what for many is their largest asset: their homes. Total mortgage debt hit a record $10.8-T, besting the prior high set more ahead of the Great Financial Crisis. The $144.4-B increase was the biggest since Q-3 of Y 2007.
Currently Congressional lawmakers are negotiating a further COVID aid/relief/stimulus package. They have not come to agreement on which parts of the economy will get the aid yet.
The Fed’s accounting of the nation’s wealth indicates less broad need for cash, but does not rule out the possibility that poorer households or those suffering longer-term joblessness may be in trouble.
President Trump upped the aid amount to $916-B as of Wednesday.
Thursday, the benchmark US stock market indexes finished at: DJIA -69.55 to 29999.20, NAS Comp +66.85 at 12405.72, S&P 500 -4.72 to 3668.11
Volume: Trade on the NYSE came in at 966-M/shares exchanged.
HeffX-LTN’s overall outlook for the major US stock market indexes is Bullish with a Very Bullish bias as the Small Caps take the lead.
- NAS Comp +38.3% YTD
- Russell 2000 +15.2% YTD
- S&P 500 +13.5% YTD
- DJIA +5.1% YTD
Looking Ahead: Investors will receive the Producer Price Index (PPI) for November and the preliminary University of Michigan Index of Consumer Sentiment (MSI) for December Friday.
Have a healthy weekend, Keep the Faith!