A new report from the Center for American Progress, a left-leaning think tank, looked at how wealth changed for different age cohorts from 2019 to 2023 by analyzing data from the Federal Reserve's Distributional Financial Accounts.
The analysis found good news for the much-beleaguered millennial generation: Their wealth grew at a historic clip.
Per CAP's analysis, from the end of 2019 to the end of 2023, the average wealth of households under 40 grew by 49% — a $85,000 increase, to $259,000 from $174,000. The analysis said that rate of rapid wealth growth had never happened before in the data series' history, and it came after wealth growth remained relatively stagnant for young Americans prepandemic.
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Here's the whopper: Wealth gains were even higher for just millennials, who were 23 to 38 in 2019; their wealth doubled from the end of 2019 to 2023.
To be sure, a cohort entering their prime earning years is expected to see a big wealth gain as its members buy houses and begin to invest in earnest. Housing wealth rose, and more households under 35 owned property in 2023 than in 2019; at the same time, credit-card and student-loan debt fell.
But the most surprising finding is that those gains came during and after the pandemic recession — a type of contraction that historically has meant far worse economic outcomes for the younger workers caught up in its wake.
"Millennials weathered the pandemic recession much better financially and with an improved financial security outlook than Gen X and the Baby Boomers did when they experienced recessions at similar ages," the report's authors, Brendan Duke and Christian Weller, wrote.
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For instance, during 2007's Great Recession, Gen Xers were 27 to 42 — similar to millennials heading into the pandemic. But their real wealth grew by only 4% in the four years following that recession. Similarly, baby boomers, who were 26 to 44 during the 1990 recession, saw their real wealth grow by 46% in the four years after that recession. Those examples pale in comparison to how well millennials made out.
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Millennials also weathered the Great Recession early in their careers and have borne the brunt of the student-loan crisis. It's yet another data point showing how the pandemic economic recovery diverged from past contractions and may have chipped away at the tough odds millennials were facing down.
Why millennials are faring so well in the wake of the pandemic recession
You might be able to chalk some of millennials' gains up to the robust labor market that pandemic-era stimulus birthed.
"The pandemic and unprecedented support we gave families — including young people — through cash payments, student-loan pauses, and more helped drive the initial surge in wealth for younger Americans," Duke told Business Insider. "We have sustained this wealth boom with a historically strong labor market that is pulling in younger workers and delivering strong inflation-adjusted wage growth at the beginning of their careers."
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Other research has unearthed similar findings. As BI's Noah Sheidlower previously reported, Americans under 35 saw their real median net worth grow by 143% from 2019 to 2022, per the Federal Reserve's Survey of Consumer Finances, which mostly recently tracked wealth and net-worth data through 2022. This data, the authors of the CAP analysis noted, suggests wealth gains weren't just reserved for the top-earning millennials, since both median and average wealth grew.
"This suggests that the strong wealth growth for younger Americans is broad-based and not the result of strong growth of a handful of wealthy younger households," the authors wrote.
However, the Fed's survey found that the wealthiest Americans on the whole saw their net worth grow at higher rates.
Meanwhile, the Liberty Street Economics blog at the Federal Reserve Bank of New York found that Americans under 40 saw their real wealth grow by nearly 80% from the first quarter of 2019 through the last quarter of 2023. That report said financial assets were a major component of younger Americans' wealth growing.
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And so it might finally be time for millennials to shine. They still might not be able to buy houses, though.
"We need to keep this robust labor market going, and Congress needs to set its sights on younger Americans' greatest affordability challenge: housing," Duke said.
Are you a millennial who fared economically better during the last few years? Contact this reporter at [email protected].
