March 8, 2018 / 4:59 PM / 16 days ago

U.S. household net worth $98.7 trln in Q4 2017

WASHINGTON, March 8 (Reuters) - U.S. household wealth reached $98.7 trillion in the fourth quarter of last year, driven by a rising stock market and real estate prices, a report by the Federal Reserve showed on Thursday.

That compares to an downwardly revised $96.7 trillion net worth for households in the previous quarter.

Although the U.S. stock market has been volatile over the past couple of months, it remained buoyant until the beginning of this year. During the fourth quarter of 2017, the S&P 500 jumped by about 10 percent. The value of stocks increased $1.3 trillion, the report showed.

Household borrowing rose at a 5.2 percent annual rate in the October-December period, the report also showed, up from a 3.5 percent growth rate in the third quarter.

Consumer credit increased at a 7.8 percent annual rate, up from 3.6 percent in the prior quarter.

The value of real estate grew $0.5 trillion, the report said. Growth in mortgage debt rose to a 3.0 percent annual rate from 2.8 percent in the previous period.

The U.S. economy is in its third-longest period of growth since World War Two and the unemployment rate at 4.1 percent is near a 17-year low.

Elsewhere in the U.S. central bank’s report, liquid assets held by non-financial firms were $2.5 trillion versus a revised $2.4 trillion in the July-September period.

The strength of the U.S. economy has prompted the Fed to continue with incremental increases in borrowing costs as part of a tightening cycle it began in late 2015.

It has since raised interest rates another four times and investors widely expect another nudge upwards in the lending rate at its next policy meeting on March 20-21. (Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama)

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