A new report from the Federal Reserve claims that the average American household actually saw an increase in its net worth during the Chinese Coronavirus pandemic.
As reported by Axios, the Fed’s Survey of Consumer Finances, which is released every three years, came out on Wednesday. It was lasted conducted in 2019, thus meaning the next iteration would be held after the pandemic, covering the three-year time period from start to finish.
In 2019, the median U.S. household had a net worth of $141,100, adjusted for inflation. In 2022, that number rose to $193,000. At the same time, various measures of “financial fragility” declined over the same period, with the median debt payments as a share of income falling to 13.4%, the lowest rate in the 33 years since the survey was first started.
“It’s especially striking given the massive job loss we saw when the pandemic set in,” said Karen Dynan, a Harvard economist. “I think if you had asked me at the time what household finances would look like two years later, I would have been very pessimistic.”
Some have attributed this trend to the massive relief efforts that were rolled out after the start of the pandemic, including several major bills signed into law by President Donald Trump. These efforts amounted to a collective total of $5 trillion in aid spending, as well as $4.7 trillion in quantitative easing after the Federal Reserve implemented near-zero interest rates in order to preserve the values of homes, stocks, and other assets.
These measures ultimately prevented a decline in asset values, a depletion of savings, and an increase in household debt, all of which occurred in the aftermath of the 2008 financial crisis. But the massive spending has dramatically inflated the federal debt, with some blaming this spending for the rise in inflation.