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US wealth gap grew during recovery

Stock holdings outpace homes

WASHINGTON — The richest Americans got richer during the first two years of the economic recovery while average net worth declined for the other 93 percent of US households, a report released Tuesday said.

The upper 7 percent of households owned 63 percent of the nation’s household wealth in 2011, up from 56 percent in 2009, said the report from the Pew Research Center, which analyzed Census Bureau data released last month.

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The main reason for the widening wealth gap is that affluent households typically own stocks and other financial holdings that increased in value, while the less wealthy tend to have more of their assets in their home, which has not rebounded from the plunge.

Tuesday’s report is the latest to point up financial inequality that has been growing among Americans for decades, a development that helped fuel the Occupy Wall Street protests.

A September Census Bureau report found that the highest-earning 20 percent of households earned more than half of all income the previous year, the biggest share in records kept since 1967. A 2011 Congressional Budget Office report said incomes for the richest 1 percent soared 275 percent between 1979 and 2007 but just under 40 percent for the middle 60 percent of Americans.

Other details:

 The wealth of American households rose by $5 trillion, or 14 percent, during the period from $35.2 trillion in 2009 to $40.2 trillion in 2011. Household wealth is the sum of all assets such as a home, car, and stocks, minus all debts.

 The average net worth of households in the upper 7 percent of the wealth distribution rose an estimated 28 percent, while that of households in the lower 93 percent dropped by 4 percent. That is, the mean wealth of the 8 million households in the more affluent group rose from an estimated $2.5 million to an estimated $3.2 million while that of the 111 million households in the less affluent group fell from $140,000 to roughly $134,000.

 The upper 7 percent were the households with a net worth above $836,033 and the 93 percent represented households whose worth was at or below that. Not all households among the 93 percent saw a decline, but the average amount declined for that group.

 Standard & Poor’s 500 stock index rose 34 percent, while the Standard & Poor’s/Case-Shiller index for home prices fell 5 percent.

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