Heard on the Street: A record level of wealth and America’s biggest economic downturn on record last quarter underscores how the downturn has hurt poorer Americans while leaving many of their richer counterparts relatively unscathed
increased by $7.6 trillion
, or 6.8%, in the second quarter from the first quarter, to $119 trillion. That pushed it above the previous record, set in the fourth quarter. And now, with stocks at higher levels than they were at the end of the second quarter—and the value of real estate continuing to rise—household net worth is surely even higher.
The rebound in wealth stands in contrast with what happened to the economy in the second quarter, when gross domestic product registered itsof record-keeping. GDP will likely see a substantial rebound in the third quarter, but it still looks likely to remain below pre-Covid levels. Federal Reserve projections suggest it won’t fully recover until the latter half of next year.
The differing paths of wealth and economic output underscore how the downturn has hurt poorer Americans while leaving many of their richer counterparts relatively unscathed. Only a bit more than half of U.S. families have, according to the Pew Research Center, including through pension plans and 401 accounts. Fewer than 1 in 5 families making less than $35,000 a year hold any stocks, while nearly 9 in 10 families making $100,000 do.
Those poorer Americans also have more often tended to be the ones who lost jobs during the downturn, which has had an outsize effect on work in low-paying service-sector industries, such as restaurants. Job losses among the better off have been much less severe. As a result, the gaps between rich and poor have only widened.
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