Page 22 - MIN SJA 11 MAART 2016
P. 22
U.S. NEWS A7
Friday 11 March 2016
US Financial Front:
Higher stock prices, home values lift US household wealth
C. S. RUGABER borrowing. A woman pays for merchandise at a Kohl’s department store in Sherwood, Ark. On Thursday,
AP Economics Writer Some of the gains have
WASHINGTON (AP) — likely reversed in the past March 10, 2016, the Federal Reserve reported on household wealth for the October-December
Americans’ household couple of months. The
wealth jumped in the final stock market, as measured quarter. (AP Photo/Danny Johnston)
three months of last year, by the Standard & Poor’s
pushed higher by rising 500 index, closed Wednes- while new home sales and Higher stock and home aftermath of the reces-
stock prices and greater day 2.7 percent below construction may level off prices can make consum- sion, economists say. After
home values. That leaves its level at the beginning this year. Businesses have ers feel richer, a phenom- watching home values and
many households, particu- of the year. Home prices, also held back on buying enon economists call the financial markets plunge,
larly wealthy ones, with however, have continued new machinery and other “wealth effect.” Some an- more Americans likely see
more money to spend — to rise. equipment. alysts estimate that each those gains as temporary,
a potential boost to eco- The figures show that Amer- That leaves the consumer dollar of additional wealth and may be more reluc-
nomic growth. icans, on average, were as a crucial source of eco- can lead to 3 cents to 5 tant to spend them right
The Federal Reserve said in decent financial shape nomic growth. In January, cents of additional spend- away.
Thursday that U.S. house- when 2016 began. The ra- Americans bolstered their ing. In addition, household
hold net worth increased tio of household debt to spending by the most in Yet the wealth effect may wealth is distributed more
1.9 percent in the fourth income — a key measure eight months. have diminished in the unequally.
quarter to $86.8 trillion, up of whether consumers are
from $85.2 trillion in the third borrowing too much —
quarter. Americans’ stock stood at 106.8 percent in
and mutual fund portfolios the fourth quarter. That’s
grew $758 billion. Home down 1.2 percentage
values rose $458 billion. points from a year earlier.
The overall increase in Just before the financial
wealth masks large dis- crisis and Great Recession,
parities between richer that figure had ballooned
and less well-off house- to about 135 percent.
holds. And the Fed’s figures Greater household wealth
aren’t adjusted for popula- can trigger more consumer
tion growth or inflation. spending, a key fuel for the
Household wealth, or net U.S. economy. The strong
worth, reflects the value of dollar is dragging down
homes, stocks and other exports of manufactured
assets minus mortgages, goods by making them
credit card debt and other more expensive overseas,
Applications for US unemployment aid fall to 5-month low
C. S. RUGABER dropped 2,500 to 267,500, typically means business- kets that reflect worries items. Consumer spending
AP Economics Writer the lowest reading since es are hiring at a steady about slowing overseas rose in January at the fast-
WASHINGTON (AP) — The the week of Oct. 31. And pace. growth. est pace in eight months.
number of people seeking the number of people ac- The data comes after last KEY DRIVERS: Consumers Consumers are also confi-
U.S. unemployment aid fell tually receiving benefits week’s jobs report, which are spending at a healthy dent enough to purchase
last week to the lowest lev- also declined, falling 4,500 was mostly positive. It pace, offsetting the drags big-ticket items like homes
el since October, evidence to 2.25 million. That’s down showed employers added from weak economies in and cars. That has led
that employers are confi- 6 percent from a year ago. 242,000 jobs in February China, Europe, Japan and to the creation of more
dent enough in the econo- THE TAKEAWAY: Applica- and the unemployment many developing coun- construction jobs, though
my to hold onto their staffs. tions are a proxy for lay- rate stayed at an eight- tries.Americans are seeing manufacturing jobs have
THE NUMBERS: Weekly un- offs, so the figures indicate year low of 4.9 percent. some signs of higher in- lagged. Many factories
employment benefit appli- that employers are cutting While hiring slipped a bit comes and are spending have cut output because
cations fell 18,000 to a sea- fewer jobs. Any reading in January, overall job more at restaurants and the strong dollar has made
sonally adjusted 259,000. below 300,000 is historically gains have remained solid at online retailers. Low gas U.S. goods more expensive
The four-week average, low. When unemployment since last fall, despite sharp prices have also left more overseas, reducing U.S. ex-
a less volatile measure, claims are this low, it also swings in the financial mar- money to spend on other ports.
