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Household worth on the upswing

– Household wealth in the U.S. climbed in the third quarter, reflecting increases in stock values and home prices that are helping boost consumer confidence.

Net worth for households and nonprofits increased by $1.72 trillion from July through September, or 2.7 percent from the previous three months, to $64.8 trillion, the Federal Reserve said in a report Thursday.

A recovery in household wealth, which plunged in the wake of the recession, may put more Americans in the mood to spend during the holiday shopping season and give the world’s largest economy a lift. Net worth is still below its pre-recession peak, one reason the Federal Reserve is considering additional actions to spur expansion.

“If households feel wealthier they’ll tend to spend more,” said Dana Saporta, a U.S. economist at Credit Suisse in New York. “They’re more likely to go out and spend on cars, go buy a house, which will have a positive reinforcing effect on the economy.”

The value of financial assets owned by U.S. households, including stocks and pension fund holdings, increased by $1.3 trillion in the third quarter.

More than $800 billion was added to U.S. equity values last quarter. The Standard & Poor’s 500 Index advanced 5.8 percent from July through September.

Household real estate assets rose by $301 billion, the report said. Owners’ equity as a share of total household real-estate holdings climbed to 44.8 percent last quarter from 43.4 percent.

Multiple measures show U.S. home values are on the path toward recovery. CoreLogic Inc. said last month that single-family home prices climbed 7.6 percent in the third quarter from a year earlier.

Home values in the third quarter increased 3.6 percent from the same period in 2011, the biggest gain in two years, according to S&P/Case-Shiller data.

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