Economists say the rising stock market is giving an added boost to consumer spending through what is known as the "wealth effect."

Key Points

  • The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter.
  • All of the gains came from stock holdings thanks to an end-of-year rally.
  • Economists say the rising stock market is giving an added boost to consumer spending through what is known as the “wealth effect.”

The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter, as an end-of-year stock rally lifted their portfolios, according to new data from the Federal Reserve.

The total net worth of the top 1%, defined by the Fed as those with wealth over $11 million, increased by $2 trillion in the fourth quarter. All of the gains came from their stock holdings. The value of corporate equities and mutual fund shares held by the top 1% surged to $19.7 trillion from $17.65 trillion the previous quarter.

While their real estate values went up slightly, the value of their privately held businesses declined, essentially canceling out all other gains outside of stocks.

    • Flying Squid@lemmy.world
      11·
      7 months ago

      That isn’t even remotely the same as communism. That is capitalism with an upper income limit.

      You don’t have some people earning $100 million a year and others making $25,000 a year under communism. That’s only possible in a capitalist economic structure.

      Your understanding of communism is on par with that of Joseph McCarthy.

    • _tezz@lemmy.world
      3·
      7 months ago

      Please stop commenting on politics if this is your level of education on the matter. Communism is absolutely not relevant here, because communism is

      a socioeconomic order centered around common ownership of the means of production, distribution, and exchange that allocates products to everyone in the society based on need. A communist society would entail the absence of private property and social classes, and ultimately money and the state (or nation state).

      You haven’t even begun to understand if you think communism is related to this discussion.