Household Net Worth Rises ($link)

The net worth of American households climbed again in the second quarter, bolstering the ability of families to weather soaring energy prices.

In its quarterly "flow of funds" report, the Federal Reserve said U.S. household net worth rose for the eleventh—consecutive quarter to a record $49.8 trillion in the second quarter of 2005. That was up 1.9% from the first quarter and up 9.4% from a year earlier.

Household net worth is a measure of total assets —— such as houses, stock investments and pensions —— minus total liabilities, such as mortgages and credit—card debt. Soaring home values have been an important factor driving the net worth of households higher, and in sustaining consumer spending. With energy costs rising, households have been saving less of their take—home pay in recent months. But they have kept spending from accumulated wealth and by borrowing against wealth.

Ed Lasky   9 22 05