U.S. Household Wealth Climbs to Highest Level Since Recession Began
The Federal Reserve’s quarterly “Flow of Funds” report issued Thursday showed U.S. family net wealth climbing $1.17 trillion at the end of 2012 to the highest level since late 2007.
Household net worth, which includes the value of homes and investments minus debts and liabilities, also grew 1.8% to $66.07 trillion in the fourth quarter of 2012, the highest level since the fourth quarter of 2007.
Home mortgage debt declined 0.8% marking the lowest level since the beginning of 2009. And Thursday, the Dow Jones Industrial Average hit its third straight intraday record.
The Fed figures and market metrics have analysts hopeful that Friday’s jobs report will show encouraging signs of recovery in the labor market. The Labor Department’s unrevised jobless claims showed the lowest levels of the year, falling to 340,000 for the week ending on March 2.
The Fed figures offer a snapshot of American’s financial situation prior to the 2012 presidential election that may have shaped economic perceptions in President Barack Obama’s favor.
All eyes now turn to Friday's jobs report. "If payrolls disappoint, we'll have a pullback, but that won't be enough to derail the rally," said head of ING Investment Management’s asset allocation Paul Zemsky. "If the report is strong, markets still have room to grow."