WASHINGTON (Reuters) - U.S. household wealth rose to $118.4 trillion in the final quarter of last year, a Federal Reserve report on Thursday showed, a situation set to reverse in the coming period as stock markets continue to be pummeled by fears of a recession caused by the escalating coronavirus outbreak.
The data, which accounts for last October through December when the U.S. economy was still healthy, showed that the majority of the increase in wealth came from rising U.S. stock prices at the time. The value of equities increased by $2.6 trillion.
Household net worth was also upwardly revised to $115.2 trillion in the third quarter of 2019.
The U.S. Federal Reserve slashed interest rates by half a percentage point last week in an emergency move in order to support the U.S. economy from the impact of the coronavirus pandemic. The past month has seen a sharp escalation in the number of U.S. confirmed cases of the flu-like illness.
The reduction in borrowing costs has so far done little to calm financial markets. U.S stocks have lost roughly $6 trillion in value since Feb. 19 amid widespread fears of a global recession. Earlier on Thursday, the S&P 500 and the Nasdaq fell into a bear market as a shock move by President Donald Trump to suspend travel from Europe rattled already alarmed investors.
Elsewhere in the report, household borrowing rose at a 4.1% annual rate in the fourth quarter, down from an upwardly revised 3.4% growth rate in the third quarter of the year.
Liquid assets held by non-financial firms were $4.9 trillion versus an unrevised $4.7 trillion in the July-September period.
Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci
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