Changes in U.S. Family Finances from 2016 to 2019: Evidence from the Survey of Consumer Finances

Abstract

The Federal Reserve Board’s Survey of Consumer Finances for 2019 provides insights into the evolution of family income and net worth since the previous time the survey was conducted in 2016. The survey shows that over the 2016–19 period, the median value of real (inflation-adjusted) family income before taxes rose 5 percent, and mean income decreased 3 percent. Real median net worth increased 18 percent, and mean net worth rose 2 percent. This survey marks the first in the aftermath of the Great Recession in which between-survey changes in the median outpaced changes in the mean for either measure, indicating that families in large parts of both distributions enjoyed gains in economic well-being. And, while the data also reveal some disparities in the evolution of income and net worth since 2016 across families differentiated by economic characteristics, such as income or wealth, and demographic characteristics, such as age, education, or race and ethnicity, many groups with historically lower income and net worth saw relatively large gains. This article reviews these and other changes in the financial condition of U.S. families, including developments in assets, liabilities, debt payments, and credit market experiences. The findings in this article do not reflect the effects of the COVID-19 pandemic on family finances, as almost all of the data in the 2019 survey were collected before the onset of the pandemic.

The Changing Face of Wealth Inequality in the USA

“…The increase in NFNs at the lower middle and middle levels was most dramatic, and while the higher upper group fared better than the others, even their NFN increased by about 30% over these seven years. While the wealth of most groups increased between 2016 and 2019, 5 the total wealth of the Forbes 400 grew more than 22% during those years (from $2.4 trillion to $2.96 trillion), which exceeded the growth rate of the other upper level groups but was broadly equal to that of the lower middle group.…”

“…Every three years since 1989 the SCF has obtained data on the wealth of Americans and the composition of the assets of households. 5 The survey sample, however, excludes 400 of the very richest familiesthose whose wealth is estimated every year in the Forbes 400 rich list. 6 Therefore, an analysis of wealth inequality from the SCF will underestimate the degree of inequality.…”

“…In trying to understand changes in wealth inequality in the USA, we can turn to another source of data produced by the Federal Reserve Board: the Survey of Consumer Finances (SCF). Every three years since 1989 the SCF has obtained data on the wealth of Americans and the composition of the assets of households 5 . The survey sample, however, excludes 400 of the very richest families – those whose wealth is estimated every year in the Forbes 400 rich list 6 .…”

Monetary Policy and Racial Inequality

“…The SCF provides representative household-level data on the financial situation of U.S. households. The SCF employs a particular survey design to oversample wealthy households that allows researchers to study the entire U.S. wealth and income distribution, including the richest households (Bricker, Dettling, et al (2017); Bhutta, Bricker, et al (2020); Kuhn, Schularick, and Steins (2020). The detail of the financial information, the data quality, and the extent of the household coverage have made the SCF the primary source for the study of the income and wealth distribution of U.S. households.…”

Recent Trends in the Material Well-Being of the Working Class in America

“…Owning a home is a major source of wealth for American families, accounting for at least one-half of net worth for the average household and even more for those in the lower half of the income distribution (Bhutta et al 2020). Figure 8 presents trends on whether the household owns their home.…”