US wealth inequality grew worse through current recovery, NY Fed study shows

by | Feb 7, 2024 | Business

By Howard Schneider

WASHINGTON (Reuters) -The inflation-adjusted wealth of white households in the U.S. grew faster than that of Black and Hispanic households from the start of 2019 through the third quarter of last year, with Black households in particular now worse off than they were before the pandemic, a New York Fed study has concluded.

The study used information gathered by the U.S. Federal Reserve on the value of household assets including stocks and real estate, as well as liabilities owed on mortgages and other loans, and adjusted those values for inflation.

The result showed the net worth of white families as of the third quarter of last year was 28% higher than it was at the start of 2019, that of Hispanic households was 20% higher, and that of Black families about 1.5% lower than it was before the pandemic.

New York Fed researchers in a blog post released on Wednesday attributed the outcome to changes in the value of financial assets, with the comparatively larger holdings of equities by white households apparently driving stronger wealth gains.

Black household wealth, the research noted, was more heavily concentrated in retirement holdings.

While all groups saw gains in net worth through the worst of the pandemic in 2020 and 2021, when federal fiscal programs offered expansive unemployment and other benefits, subsequent declines amid rising inflation and sagging financial markets hit Black families the hardest and pushed their net worth back below the 2019 level.

The research is the latest look at how households fared through the pandemic and into the current economic expansion, and pointed to the fact that the trillions of dollars in fiscal spending offered to support families through the health crisis does not appear to have produced lasting changes in the distribution of wealth among major demographic groups.

(Reporting by Howard Schneider; Editing by Andrea Ricci and Chizu Nomiyama)


Sponsored Headlines