Economy Watch: Wealthy Households Do Well in Post-Recessionary Period
- Apr 25, 2013
The Pew Research Center reported this week that the wealthiest 7 percent of American households experienced a 28 percent increase in their wealth during the post-panic years of 2009 to 2011. That contrasts sharply with the experience of the remaining 93 percent of U.S. households, who experienced a 4 percent lost in net worth over the same period. Pew analyzed Census Bureau data to come to its conclusion.
The report noted that average household wealth for the upper 7 percent increased to $3.17 million in 2011, compared with an average of $2.48 million two years earlier. Wealth for the remaining 93 percent dropped to an average of $133,817 in 2011, compared with $139,896 in 2009.
Wealthy families have benefitted mightily from the recovery of the stock market and bond prices during that period, since a large share of their wealth is invested in stocks and bonds. Much of the net worth of less-wealthy families is represented by their homes, which did not do particularly well from 2009 to 2011, though residential real estate has made something of a recovery since then (but still not as much as Wall Street).
Architectural bills still rising
The American Institute of Architects said on Wednesday that its Architecture Billings Index is came in at 51.9 in March, a slip from February’s reading of 54.9, but still in positive territory. An index of more than 50 indicates growth in architectural billings, which points to growing real estate development in the near future.
As a leading economic indicator of construction activity, the AIA’s index reflects the roughly nine- to 12-month lag time between architecture billings and construction spending. The March score reflects a continued increase in demand for design services. The new projects inquiry index was 60.1, down from the reading of 64.8 the previous month.
“Business conditions in the construction industry have generally been improving over the last several months,” AIA chief economist Kermit Baker explained in a press statement. “But as we have continued to report, the recovery has been uneven across the major construction sectors, so it’s not a big surprise that there was some easing in the pace of growth in March compared to previous months.”
Durable goods orders shrink
The U.S. Department of Commerce reported on Wednesday that durable-goods orders dropped 5.7 percent, mostly on the weakness of orders for airplanes. It was the steepest drop for the metric since the summer of 2012. Orders for transportation goods contracted 15 percent for the month, led by a major downward swing in civilian aircraft and parts—a 48.2 percent drop.
Wall Street had a mixed day on Wednesday. The Dow Jones Industrial Average lost 43.16 points, or 0.29 percent, while the S&P 500 essentially broke even, and Nasdaq was up a scant 0.01 percent.