Thursday, June 8, 2017

Total Household Net Worth As A Percent Of GDP 1Q 2017

The following chart is from the CalculatedRisk post of June 8, 2017 titled “Fed’s Flow of Funds:  Household Net Worth increased in Q4.” 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)

Total Household Net Worth As A Percent Of GDP

As seen in the above-referenced CalculatedRisk post:
Household net worth was at $94.8 trillion in Q1 2017, up from $92.5 trillion in Q4 2016.
The Fed estimated that the value of household real estate increased to $23.5 trillion in Q1. The value of household real estate is now above the bubble peak in early 2006 - but not adjusted for inflation, and this also includes new construction.
As I have written in previous posts concerning 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 2431.56 as this post is written

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