The financial picture for average Americans has brightened a bit recently, according to new government data.
A rising stock market and lower debt boosted the net worth of U.S. households by $1.2 trillion in the third quarter, according to statistics released by the Federal Reserve on Thursday.
After falling in the second quarter because of a declining equity market, net worth rose 2.2% to $54.9 trillion in the third quarter and is up $1.1 trillion for the year.
The added wealth, and the upbeat feelings that come with it, are helping propel consumer spending in the holiday shopping season. Sales rose a stronger-than-expected 6% at major chain stores last month.
But while the news in the stock market has been good lately, the report underscored the continued weakness in housing despite the central bank's efforts to prop it up. A $700-billion drop in home values weighed down a $1.9-trillion increase in stocks and other financial assets, according to research firm IHS Global Insight.
Still, Americans are continuing to pare their debt even as they're boosting spending. Household debt fell at a 1.75% annual rate, the 10th straight quarterly drop, according to the Fed.
"Looking ahead, we expect household net worth to keep its momentum," Gregory Daco, an economist at IHS Global, wrote in a note to clients. "Stock markets have been moving upwards since early September. As such, financial gains should offset real estate losses resulting from lower housing prices and very weak sales."