According to a new report from the Federal Reserve, many Americans experienced significant gains in their wealth during the pandemic. The net worth of the median U.S. household increased by 37%, reaching $192,900 between 2019 and 2022. This surge in wealth can be attributed to rising home and investment values, as well as federal stimulus payments. The Survey of Consumer Finances, published by the central bank, provides insights into the financial health of households by examining income, wealth, and debt.
The pandemic-induced recession resulted in the loss of 20 million jobs, but the rapid recovery, fueled by relief measures such as stimulus checks and extra unemployment aid, helped bolster many households. These gains were widespread across different age groups, races, and education levels, indicating that increases in both median and mean net worth were near universal. The boost in wealth among many families helps explain the robustness of the economy this year, despite a series of interest rate hikes from the Federal Reserve.
Government payments in the aftermath of the pandemic also played a significant role in boosting households' finances. The median value of checking and savings accounts, as well as other cash holdings, surged by 30%, and Americans dedicated just 13.4% of their incomes to paying off debt in 2022, the lowest proportion since the Federal Reserve survey began in 1989. Additionally, borrowing rates remained historically low, further contributing to households' financial well-being.
However, despite these positive trends, substantial wealth inequality persisted. Among the wealthiest 10% of households, median wealth reached nearly $3.8 million in 2022. Significant disparities also remained between racial groups, with Black households having a median wealth of about $45,000, compared to $285,000 for the median White household. Asian American households had the highest median wealth, with approximately $536,000 in assets.
The report also highlighted that while wealth inequality declined during the pandemic, income disparities worsened. Median incomes grew by 3% compared to the previous survey, while average incomes, which include the earnings of the wealthiest households, jumped by 15%. The outsize gain among the richest households was driven by profits on stock and property holdings, as well as higher wages.
The Federal Reserve report offers the most comprehensive snapshot of household finances, covering everything from savings to stock ownership across different demographic groups. It reveals that American families experienced the largest jump in wealth on record between 2019 and 2022, thanks to factors such as rising stock indexes, climbing home prices, and repeated rounds of government stimulus. The data underscores the strong financial position of American households as they emerge from the pandemic, with solid net worth and growing incomes contributing to continued consumer spending and a resilient economy.
