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Comparing the assets of the rich, poor, and middle class

Data on the asset distribution across U.S. households

The FRED Blog has covered income and wealth before: for example, distribution of wage income, net worth, and assets. This post covers household assets, but compares them across groups: the top 1%, the 90-99%, the 50-90%, and the bottom 50%. FRED has data from the Board of Governors of the Federal Reserve System’s Survey of Consumer Finances, and the graph above shows the total assets for households in these four wealth/asset groups.

It’s clear from the graph above that the bottom half of households collectively hold significantly fewer assets than any of the three other groups. Those groups hold about the same order of magnitude in assets, but with populations of very different sizes (40%, 9%, and 1% of the total number of households).

We also see that, for these three groups, total assets have grown almost continuously, except for a dip in the past recession. Of course, this could be due simply to inflation and population growth…

So, the second graph does this adjustment. It shows that total assets have increased over time for all three groups, even after this rescaling.

The third graph offers a further adjustment by dividing each line by the size of the group. This gives us an idea of the relative magnitude of the assets per capita in each group. The differences are so large that we removed the legends to make more space for the graph. The poorest group is so low, it’s not visible. So we might as well express the assets of the three top groups as a multiple of the assets of the poorest 50%, which we do in the last graph. Beyond the stark differences between the groups, it’s quite obvious that the assets of the top 1% have increased faster than those of the other two groups since the past recession. In fact, they have almost doubled relative to the poorest 50%, from 139 times to 258 times at the apex in 2017:Q1, to 235 times now.

How these graphs were created: Start with the release table for Levels of Wealth by Wealth Percentile Groups, select the four first series, click “Add to Graph.” That’s the first graph. For the second, use the first and go to the “Edit Graph” panel. For each line, in the “Edit Line…” tab, use the “customize data” tool to search for and add the CPI series and then the population series, and apply formula a/b/c. Repeat for the three other lines. For the third graph, modify the formula to divide each by 0.01, 0.09, 0.4, and 0.5, respectively. From the “Format” tab, deselect legends and axis labels to free up some space. For the last graph, for the first three lines, add series “WFRBLB50081” and add /(d/.5) to the formula. Remove the fourth line by deleting each of its constituting series.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: B230RC0Q173SBEA, CPIAUCSL, WFRBLB50081, WFRBLN09027, WFRBLN40054, WFRBLT01000

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