The wealth of the top 1% of Americans reached a record figure of 44,600 billion dollars in the fourth quarter of 2023. According to US media reports, the wealth of the 1%, defined by the Fed as those with wealth exceeding 11 million dollars, increased by $2 trillion in the quarter under review. All the gains have come from stock holdings thanks to the year-end rally, and economists say the stock market rally is providing a further boost to consumer spending through what's known as the "wealth effect." “The wealth effect from soaring stock prices is a powerful benefit to consumer confidence, spending and overall economic growth,” said Mark Zandi, chief economist at Moody's Analytics. “Of course, this highlights a vulnerability of the economy should the stock market falter,” he added. “This is not the most likely scenario, but it is a scenario given that stocks appear vastly (over)valued.”
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