Tuesday, October 20, 2020
Oct. 20, 2020

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Soaring wealth during pandemic highlights rising U.S. inequality

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WASHINGTON — Americans’ household wealth rebounded last quarter to a record high as the stock market quickly recovered from a pandemic-induced plunge in March. Yet the gains flowed mainly to the most affluent households even as tens of millions of people endured job losses and shrunken incomes.

The Federal Reserve said Monday that American households’ net worth jumped nearly 7 percent in the April-June quarter to $119 trillion. That figure had sunk to $111.3 trillion in the first quarter, when the coronavirus battered the economy and sent stock prices tumbling.

Since then, the S&P 500 stock index has regained its record high before losing some ground this month. It was up 2.8 percent for this year as of Friday. The tech-heavy Nasdaq has soared more than 20 percent this year.

The full recovery of wealth even while the economy has regained only about half the jobs lost to the pandemic recession underscores what many economists see as America’s widening economic inequality. Data compiled by Opportunity Insights, a research group, show that the highest-paying one-third of jobs have almost fully recovered from the recession, while the lowest-paying one-third of jobs remain 16 percent below pre-pandemic levels.

The wealth data “highlights the inequalities in the recovery in the sense that high-income workers not only have jobs that for the most part have come back; they also have savings that have continued to grow,” said John Friedman, an economist at Brown University who is co-director of Opportunity Insights.

The richest one-tenth of Americans owned more than two-thirds of the nation’s wealth, according to Fed data through the end of March, the latest period for which figures are available. The top 1 percent owned 31 percent.

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