December 4, 2019
Consumer net worth rose $0.6 trillion in the third quarter. That works out to an annualized rate of increase of 2.0%, but that follows a 6.7% increase in the third quarter. Over the past year consumer net worth has increased 3.4%. However, stock prices plunged in the fourth quarter of last year. This year stock prices have surged. For 2019 as a whole we anticipate an increase in consumer net worth of about 8.0%
The growth in net worth reflects both the steady increase in stock prices during the course of the past several years, and the growth in home prices.
As noted earlier, net worth will likely climb by 8.0% this year and probably another 5.0% in 2020. If that is the case, consumer spending is likely to continue at roughly a 2.5% pace.