Thursday, February 23, 2006
Household Net Worth Growth Slows
Americans' net worth grew between 2001 and 2004, but not nearly as strongly as it did between 1998 and 2001, according to the Federal Reserve's triennial Survey of Consumer Finances released Thursday.
The big reason: while household assets increased, thanks largely to increased home ownership and higher housing prices, debts – especially home debt -- rose considerably more.
I think there are a few key stats in here. First, median income grew only 1.6% when adjusted for inflation, while median wages actually fell. That's not good. Mean net worth grew more than median net worth; obviously, this points towards a widening of the wealth gap.
Probably the worst stat in here is that the percentage of families who are investing in the stock market or mutual funds actually fell by 3.3%, to 48.6%. We're supposedly living in an "ownership society" (and our tax code has been adjusted to reflect that desire), but this trend would seem to indicate otherwise.
I suspect that these numbers will all continue to move in undesirable directions.