The following chart is from the CalculatedRisk blog post of June 5, 2014 titled “Fed’s Q1 Flow of Funds: Household Net Worth at Record High.” It depicts Total Household Net Worth as a Percent of GDP. The underlying data is from the Federal Reserve’s Z.1 report, “Financial Accounts of the United States“ :
(click on chart to enlarge image)
As seen in the above-referenced CalculatedRisk blog post:
According to the Fed, household net worth increased in Q1 compared to Q4, and is at a new record high. Net worth peaked at $68.9 trillion in Q2 2007, and then net worth fell to $55.6 trillion in Q1 2009 (a loss of $13.3 trillion). Household net worth was at $81.8 trillion in Q1 2014 (up $26.2 trillion from the trough in Q1 2009).
The Fed estimated that the value of household real estate increased to $20.2 trillion in Q1 2014. The value of household real estate is still $2.5 trillion below the peak in early 2006.
As I have written in previous posts on this Household Net Worth (as a percent of GDP) topic:
As one can see, the first outsized peak was in 2000, and attained after the stock market bull market / stock market bubbles and economic strength. The second outsized peak was in 2007, right near the peak of the housing bubble as well as near the stock market peak.
also:
I could extensively write about various interpretations that can be made from this chart. One way this chart can be interpreted is a gauge of “what’s in it for me?” as far as the aggregated wealth citizens are gleaning from economic activity, as measured compared to GDP.
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 1940.46 as this post is written
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