The Feds serial bubble blowing policies continue to work their magic as the 2nd Quarter Flow of Funds reports shows that compliments of sharply rising home prices, aka housing costs mentioned previously, has helped to push household net worth to 89.1 trillion. That said household percent equity at 57.1% remains below the pre-bust 60% seen in 2006. Household real estate value as a percentage of GDP struggles to exceed levels achieved in 2001 despite the surge in prices over the last several years.
The Bureau of Labor Statistics or BLS reports that real or inflation adjusted earnings fell .4% in August but increased 1.3% from a year ago. Add a generous 1.7% inflation figure and gross earnings gained just 3% over the last 12-months. An example of why I’m having a real hard time accepting the 5.2% reported income gain of late. Incomes have definitely advanced nicely, but 5.2%, color me very skeptical on that one.