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Household net worth peaked at $65.7 trillion in Q2 2007. It fell by almost $17 trillion in the recession but it is up $8 trillion from the trough. The gain in net worth is due primarily to the increase in stock prices since the trough. Real estate values are still falling. They fell $260 billion in Q4 2010. They are down $6.3 trillion from their peak during the housing bubble.
The increase in stock prices is good news and it will stimulate consumption by a small amount. On the other hand, the net worth of most households is in real estate which continues to fall in value. Most households will continue to pay down their debt to reduce leverage. That is not good news for the economy.
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