WASHINGTON — Americans are recovering their shrunken wealth — gradually.
Household net worth rose in 2009's fourth quarter, mainly because the healing economy boosted stock portfolios. But the gain was slight, and less than in the previous two quarters.
The Federal Reserve said Thursday that net worth rose 1.3 percent in the fourth quarter to $54.2 trillion. It marked the third straight quarter of gains. But economists say consumers would need a stronger and more prolonged increase in their wealth to persuade them to ratchet up spending.
"It would take a string of increases of a size that they believe can continue and that they can have faith in for consumers to really boost their spending," said Scott Hoyt, senior director of consumer economics at Moody's Economy.com.
Net worth — the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards — had risen by a more robust 4.5 percent in the second quarter of 2009 and an even faster 5.5 percent in the third quarter.
Even with the gain, Americans' net worth would have to rise an additional 21 percent just to get back to its pre-recession peak of $65.9 trillion. That illustrates Americans' vast loss of wealth from the worst downturn since the 1930s.
Growth in stock portfolios delivered the biggest lift to net worth in the October-to-December period. The value of stocks rose by nearly 4 percent to $7.7 trillion. The value of real estate holdings edged up 0.2 percent.
For all of last year, consumer spending dropped 0.6 percent. This year, as wealth, the economy and financial conditions slowly recover, consumer spending is projected to grow about 2.2 percent, the National Association for Business Economics says.
Hoyt doesn't think household wealth will return to its pre-recession levels until at least 2012.