I’d like to thank the Federal Reserve for ruining my day. I had expected the 2013 Survey of Consumer Finances to tell a happier story when it was released this year, but the new report is downright depressing. Although the stock market has boomed and the economy appears to be making a comeback from the 2009 crisis, the Fed’s survey tells a much bleaker story.
This depressing story can be summed up in three simple charts. The first shows real median household income since 1989 – essentially flat:
But what about the financial markets? They’ve boomed since then, right? Yes, but household net worth has cratered from the highs and is essentially flat in real terms since 1989:
A big part of the reason why is the result of increased levels of debt and the collapse in housing prices. But another factor is the stagnant ownership of stocks. While the stock market has boomed in the last few decades and reaches a new all-time high the number of families who own stocks has been stagnant since the late 1990’s:
This is still a remarkably uneven recovery.