WASHINGTON -- A stock market rally at the end of last year helped Americans rebuild more of the wealth they lost during the recession -- a trend that has carried over into 2012.
The added wealth led households to borrow more for the first time since the 2008 financial crisis began, even as home values fell again. It's a notable shift that shows many consumers are finally feeling more confident about spending after years of trying to pare debt.
Household net worth increased 2.1 percent to $58.5 trillion in the October-December quarter, the Federal Reserve said Thursday. That is the biggest increase in a year, and it partially offsets a 4.2 percent drop in wealth over the summer.
Americans' stock portfolios rose nearly 10 percent last quarter to drive the gains. Over the summer, the S&P suffered its biggest quarterly loss since the financial crisis.
Household wealth, or net worth, is the value of assets such as homes, bank accounts, and stocks, minus debts such as mortgages and credit cards. It bottomed out during the recession at $49 billion in the first quarter of 2009. It would have to rise another 13 percent to regain its prerecession peak of $66 trillion.
Greater net worth can boost the economy. When people feel wealthier, they spend more.
In a separate report, household confidence rose last week to a four-year high. More Americans said the economy was improving and it was a good time to shop. The Bloomberg Consumer Comfort Index was minus 36.7 up to March 4, the highest since April, 2008, up from minus 38.8 in the prior period.
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