Rising stocks and financial assets helped U.S. household wealth grow by $19 trillion during the pandemic to $137 trillion, but wealth inequality has gotten worse, according to a new report. That means American household net worth increased 16% from the end of the fourth quarter of 2019 through the first quarter of 2021, marking the largest 15-month stretch of gains since 2004, according to Oxford Economics.
But more than 90% of the gains in households’ holdings of real estate, equities and mutual funds in that stretch “reflect price appreciation, with the small remaining balance coming from new investments,” economists Nancy Vanden Houten and Gregory Daco at Oxford Economics wrote, in a Tuesday note. In other words, those who owned assets going into the crisis benefited the most. “Those in the top 1% of the income distribution saw their wealth increase 23%, while those in the bottom income quintile experienced only a 2.5% gain in net worth,” the team wrote.
A similar pattern in U.S. savings has occurred, with more than 80% of the $2.6 trillion in excess savings residing with those in the nation’s top two income brackets.
