(James Saft is a Reuters columnist. The opinions expressed are his own)
By James Saft
(Reuters) – Americans are richer than ever and increasingly willing to take on a bit of extra debt and yet the overall atmosphere, and the economic recovery, are surprisingly flat.
That’s because the rise in wealth is highly concentrated, consumer debt is often going towards maintaining living standards in the absence of adequate income and, perhaps most importantly, businesses are simply not investing, very likely because they have a keen grasp of the first two points.
Household net worth rose nearly $3 trillion in the fourth quarter, up 3.8 percent, registering a 14 percent gain for 2014, according to Federal Reserve data released on Thursday. (here)
This was all courtesy of an 11.6 percent annual gain in housing wealth and a whopping 12.6 percent rise in households’ financial assets like stocks and bonds.
While the gain in household wealth is an all-time high, if you adjust for inflation, financial assets are up 10 percent from their pre-recession peak but real estate assets are still 7.8 percent below where they were before the bubble burst.