A surge in U.S. wealth has been driven by stock and home values. But the gains are concentrated at the top, leaving others in a sour economic mood.
America is more prosperous than ever.
U.S. household net worth reached a new peak at the end of 2024. The unemployment rate has levitated just above record lows for three years. The overall debt that households are carrying compared with the assets they own is also near a record low.
But even a land of plenty has its shortcomings, influencing both perceptions and realities of how Americans are doing.
The U.S. economy remains deeply unequal, with vast gaps in wealth and financial security persisting even as inflation has ebbed and incomes have risen. And data designed to capture the overall population may be obscuring challenges experienced by a broad range of Americans, especially those in the bottom half of the wealth or income spectrum.
The share of wealth held by families in the top 10 percent has reached 69 percent, while the share held by families in the bottom 50 percent is only 3 percent, according to the latest reading from the nonpartisan Congressional Budget Office. (When future income claims from Social Security benefits are included, the bottom 50 percent hold 6 percent of total wealth.)
And while wealth has risen for the less wealthy half of the population in recent years, much of the uptick has been locked up in what financial analysts call “illiquid assets” — gains in home prices and stock portfolios — which are not easily translated into cash to pay for bills and expenses that are much higher than they were a few years ago.
Although the bottom 50 percent holds only a 1 percent share of all financial market wealth, six in 10 adults report owning some amount of stock. A broad range of Americans may be frustrated by the inaccessibility of this illiquid wealth, said Daniel Sullivan, research director at the JPMorganChase Institute, which tracks the finances of millions of U.S. bank account holders.
“‘Massive home equity gains, and my 401(k) is way up, but I can’t touch that, either!’” Mr. Sullivan explained, channeling the tension many people feel.“Higher-income people drive most of aggregate spending,” said Joanne Hsu, an economist and director of the Michigan survey. “They were on an upward surge of sentiment between 2022 and 2024, and that’s consistent with their strong spending.”
Part of the disconnect may stem from the tendency among economists to track income progress primarily through percentage change rather than dollar amounts.
Even when inflation was peaking around 9 percent and diluting income growth, Ms. Hsu explained, “a 10 percent boost to middle and especially higher incomes is money that feels real, like you can do something with it.”
For someone making $100,000, that means a $10,000 raise. But a 10 percent increase at the bottom, perhaps to an hourly wage of $16.50 from $15, “means you’re still living hand-to-mouth,” she added.
In a recent report, Matt Bruenig, the president of the People’s Policy Project, a liberal think tank, evaluated the long-running question in U.S. economics of how many adults are living paycheck to paycheck — a term plagued, he said, by “inherent ambiguities.”Drawing on data from the Survey of Household Economics and Decisionmaking, conducted annually by the Federal Reserve Board, Mr. Bruenig noted that “if we define someone as living paycheck to paycheck if they either say they do not have three months of emergency savings or say they cannot afford a $2,000 emergency expense,” then 59 percent of American adults are “living paycheck to paycheck.”