The top 1%’s wealth hits a record $44.6 trillion

At the end of 2023’s fourth quarter, the total wealth of the top 1% richest people in America broke records by coming in at more than $44 trillion, thanks to a year-end stock rally that boosted portfolios, reports the Federal Reserve.

The Fed defines the 1% as people with more than $11 million in wealth. As a group, their wealth grew by $2 trillion in the fourth-quarter, with all of the gains coming from stock holdings.

Consumer spending is benefiting from the rising stock market, economists say, due to the “wealth effect”—when people feel more confident spending money and taking more financial risk.

“The wealth effect from surging stock prices is a powerful tailwind to consumer confidence, spending and broader economic growth,” said Mark Zandi, chief economist of Moody’s Analytics. “Of course, this highlights a vulnerability of the economy if the stock market were to falter. This isn’t the most likely scenario, but it is a scenario given that stocks appear richly (over) valued.”