16 Dec COTW: Record High in Household Assets
As of the third quarter, aggregate U.S. household assets (excluding nonprofit organizations) are at the highest level relative to disposable personal income in history. The nearly $123 trillion of assets held by households is up around 3% from a year ago level (before market weakness in the fourth quarter) and represents more than 5 times the amount of aggregate disposable income. While the longest U.S. expansion in history is the most visible reason for these record numbers, the more elementary explanation is the unusually low level of interest rates that the Fed has felt necessary to support this economic cycle with. The question of when this all ends and mean reverts will depend on the timing of the next recession as well as if rising inflation forces the Fed to again start hiking rates. While neither appear imminent, we are clearly closer to the end of this cycle than the beginning.
The chart below can be downloaded here.
SpringTide Partners, LLC is a Registered Investment Advisor with the state of Illinois and other states jurisdictions where required. Registration with the SEC or any state securities authority does not imply a certain level of skill or training. All information contained herein is for informational purposes only and does not constitute a solicitation or offer to sell securities or investment advisory services. All investing carries risk including risk of principal loss. All statements made on this website are opinions of SpringTide Partners, LLC and are subject to change. SpringTide Partners, LLC assumes no responsibility for the accuracy of the data included. Statements made on website shall not constitute investment advice.