Stocks rose to a record high last month, housing prices rise, it is returned to the United States before the Great Depression of the family's wealth.
This is what the U.S. Federal Reserve Chairman Ben Bernanke said he hoped when the Fed announced the third round of bond-buying program in September last year.
Procurement not only to promote the interest rates fall, and make it cheaper for businesses and consumers, by - the Fed easing monetary policy tradition objectives. They also designed a pump in the stock market and housing prices make Americans feel richer and more willing to spend - a process economists call the "wealth effect."
But the wealth effect may not have Bernanke hoped the economic impact. Of course, the Dow Jones Industrial Average rose 11 percent as bond-buying policy announced in mid-September, despite the news that the Fed could end 2014 in the middle of purchasing last Wednesday and Thursday plummeted. And overall household wealth reached $ 70.3 trillion, at the end of March, to recover the $ 12.7 trillion in lost economic recession.
But Americans still do not have enough gusto to add much to the economic momentum shopping. Consumer spending actually fell, from March April. Economic output - of which 70% came from consumer spending - expected annual growth rate of only 2% from April to June, the first three months of 2013 decreased by 2.4% rate.
Why not impressive growth of wealth to help the economy bounce back briskly as usual, four years after the recession it?
Economists cite several reasons. The maximum benefit is not the vast majority of Americans. Many families are still nursing a big loss to the value of their home, housing prices dropped significantly from 2006 to 2011 has undermined their confidence. In addition, their income has been reviewed by a weak labor market and tax increase effective January curl.
The largest increase in wealth would tend to save a chunk of their smaller proportion of income and consumption, food and clothing, and other basic wealthy families. New York University economist Edward Wolff, said: "Those guys do not spend too much."
This gap shows the calculated number Wolfe. He found that the average U.S. household net worth rose this year's $ 522,000. But the average skewed higher by the majority of America's richest net worth - Bill Gates's $ 6.7 billion U.S. dollars, for example, according to "Forbes" magazine.
So look at Wolf in median net worth of American households - those smack in the middle, one half of the family income is less and less the half. Median household net worth is far higher than the average: $ 61,000 Wolfe estimated milder. This is $ 50,800, or 47%, short-term, it is in 2007.
One reason: the maximum benefit from the financial market's rise. Soaring stock market has a disproportionate benefit to America's wealthiest families. Wolf calculations, the richest 10 percent of American households own more than 80% of the stock, even including retirement accounts, such as 401 (k) plan. "The recent stock market boom, the real benefit is just at the top," Wolf said.
Income from financial markets is far weaker than the gain of wealth from the housing wealth effect: increased A $ 1, housing wealth generated about 8 cents of consumer spending. A $ 1 shares rose 3 cents to produce wealth. Rose 1 dollar bonds wealth generated less than 1 cent, Moody's Analytics chief economist Mark Zandi (Mark Zandi) said.
House there is a greater cost-effective, because it is the main source of household wealth in the middle class, they spend almost all of the profits. Bonds and stocks tend to hold the wealthy, who have spent their share is small.
But more than a house is not helpful - although housing prices rebounded from a devastating real estate bust. Many Americans still do not see the value of their home fully restored. Nearly 1 5 worth less than the mortgage, CoreLogic reported. According to the Federal Reserve, the overall interests of the owners, worth nearly $ 9.1 trillion on March 31, is still four trillion U.S. dollars, or 31%, higher than its low in late 2005.
As a result, many owners do not feel better than when the Fed began its wheels bond purchases much richer. Many can not take advantage of low interest rates Bernanke designed to refinance their mortgages and lower their monthly payments - not to mention take cash, equity of their home to the American way in the mid-2000s did splurge cargo.
Mortgage giants Freddie (Freddie Mac) said that homeowners take out only $ 810 million U.S. dollars in cash, when they refinance mortgage loans in the first three months of 2013. From April to June 2006, the height of the boom in the housing market, they cashed out 84 billion dollars.
For ordinary Americans, any wealth gains have been partially offset revenue losses. According to the Sentier Research, in April of the median household income was $ 51,456, down nearly 7 percent, adjusted for inflation, than it was the Great Depression, beginning in December 2007.
Americans' wallets pinch in January, an increase in social security taxes. Interest rate equivalent to an annual income of 1,000 yuan for a family was $ 50,000.
For all these reasons, the wealth effect "has become more gentle," Zandi said. In the past, the overall net increase of $ 1 can stimulate consumption by about 5 cents. These days, Zandi calculations, $ 1 increase in wealth generated only 2 cents to 2.5 cents expenses.
Creation of wealth may be more difficult if the Fed to continue and eventually end its bond-buying program reduced. The stock market took a beating, because the Fed said Wednesday's news: the Dow fell 206 points, 353 points on Wednesday and Thursday rebounded 41 points to close at 14,799 Friday before.
 



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