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WASHINGTON, June 5 U.S. household net worth
nudged up 2 percent to a record high $81.8 trillion in the first
quarter as the stock market continued its upward climb and
property values rose, data from the Federal Reserve showed on
The data from the Fed showed that despite patchy signs
across the U.S. economy, gains in real estate and financial
assets are bolstering the wealth of individuals.
The value of residential real estate expanded $758 billion,
according to the Fed, while direct and indirect holdings of
corporate equities increased $361 billion.
"As has been the case during the past few years, the gains
in household wealth were driven by appreciation in real estate
and financial asset prices," Barclays said in a research note on
The rise in wealth should help support consumer spending as
the U.S. economy pulls out of a winter soft patch. Many
economists think consumers spend a few cents of every dollar
they gain in wealth.
"We view the wealth effects that have resulted from
improving real estate and financial asset prices as boosting
consumption in recent quarters," Barclays said in its note on
the Fed's so-called Flow of Funds report.
During the recession, U.S. consumers cut back sharply on
spending as the value of their homes and stocks slid.
They spent the past several years paring debts, a process
that increasingly looks like it may have run its course - which
would present another positive for the spending outlook.
Household debt rose 2 percent in the first quarter,
excluding charge-offs of home mortgages, although net
originations of home mortgages continued to be weak, the Fed
said in its quarterly report, formally known as the Financial
Accounts of the United States.
The S&P 500 rose 1.4 percent in the first quarter as
the Fed continued with a highly accommodative monetary policy
for a recovering U.S. economy. For the year to date, the S&P is
up 5 percent, and hit a new intraday record high on Thursday.
Credit market borrowing by non-financial sectors, both
domestic and foreign, fell 10 percent to $2.32 trillion in the
Total liquid assets for non-financial corporations fell 5
percent to $1.85 trillion.
(Reporting by Michael Flaherty; Editing by Andrea Ricci)