This pandemic has been a roller coaster for the American economy at large, but one of the more surprising developments is the household income of Americans rose in the second quarter indicating the resiliency and robust economy going into and before the strenuous lockdowns.
When examined the net worth of American housholds and charitable organizations 6.8 percent from April through to June, to more than $118 trillion according to data released by the federal reserve that is $5.4 trillion above what it was at the same quarter in 2019. https://www.federalreserve.gov/releases/z1/default.htm
The wild and tenuous swing we saw during the lockdowns and at the height of the pandemic caused one of the biggest drops in years both in terms of net worth and financial markets. The S&P 500 dropped 25 percent in the first quarter, but then rose to nearly 20 percent in the second quarter adding that $5.4 trillion to the balance sheets of Americans. This rise accounted for much of the total increase seen in households net worth.
As lockdowns are being lifted and people returning or have been returned to work the need for consumer credit spending is lowering. We also saw that many households halted the accumulation of debt during the quarter, with consumer credit falling 6.6 percent.
The Federal government debt increased substantially as the government spent large swaths of money caused by the lockdowns such as the CARES Act increasing the Federal debt by 58.9 in quarter one while also dropping the household incomes in the first quarter despite the government incentive checks and bailouts.
Changes in Net Worth: Households and Nonprofit Organizations, 2019 – 2020