With the stock market on a tear lately, and home prices making a slow-but-steady climb, Americans have gained back the wealth that they lost during the Great Recession—all $16 trillion of it.
Mostly richer Americans have reaped the benefits of the majority of the wealth that has flowed from the stock market, while the middle class has pulled in the gains from home equity, which has risen at a much smaller rate during the same time period.
Despite the added wealth, experts worry that the effects of the recession will be lasting and will change the way consumers spend. For example, Americans worried about how drastically home prices fell in the past might now be less likely to use their home equity for spending. They might also be wary of the currently higher home prices, and therefore won’t be likely to spend more because of that.
On the other hand, if household debt is any indicator of American spending, the experts need not worry—during the October-December quarter, household debt rose by 2.4%, the sharpest gain in almost five years.