One of the most significant but little-discussed measures of American prosperity has begun moving in the right direction, according to a report released by the Federal Reserve yesterday. After falling by $1.4 trillion in the second quarter, household net worth in the U.S. climbed by $1.2 trillion in the third quarter, up to a total of $54.9 trillion. Net worth is now rising at an annual rate of 9.1 percent.
What's more impressive is that we managed to do this while also paring our debt. Total household debt fell at an annualized rate of 1.75 percent in the third quarter, down to $13.4 trillion. These are both encouraging figures heading into the holiday shopping season.
But they're also still a long way from where we need to be, or where we used to be. America's household wealth peaked in the second quarter of 2007 at $65.9 trillion. That's more than $10 trillion above where we are now, and adds up to a loss of around 17 percent of our wealth.
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