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Recession vs. Wealth Inequality

By Matthew Kerkhoff

 

The economy contracted 0.2% in the first quarter, based on the latest revision released Wednesday. But as we know, a number of temporary factors including another harsh winter, the west coast port strike, and of course the stronger dollar, tarnished economic growth.

 

With those concerns largely out of the way, many leading indicators are signaling a resumption of the current ~2% growth that we’ve been seeing since the recession ended (see chart below).

 

 

The housing sector is rebounding, consumer spending is rising, household formation is growing, and labor conditions are improving.

 

These and other factors, namely high stock prices and rising real estate values, have resulted in American household wealth hitting another record high of $84.9 trillion in the first quarter of 2015. This may sound encouraging, but there are some caveats to keep in mind.

 

First, these figures do not take inflation into account. They are also not adjusted for population growth. ... Log in or subscribe to continue reading.


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