Household net worth reached a record level in the second quarter driven by rising real estate values and a 24.5% increase in the stock market for the year ending in June. Net worth increased 7.5% over the past year and it has grown at a 7.75% annual rate since the onset of the pandemic.
As shown below, consumers’ inflation expectations fell by one-half since the first quarter of 2022. When combined with the increases in net worth, you would think that consumers would be fat and happy. Consumer sentiment has risen for four months, but it remains below the levels that prevailed in recent years. What gives?
