During Covid-19, most Americans are getting richer, especially the rich.

In some ways, the Covid-19 recession and recovery is not surprising. The extent of the pandemic is unprecedented in modern times.

So is the government’s financial response. The United States borrows, lends, and spends trillions of dollars to prevent further recession.

These actions are central to the unusual nature of both recession and recovery. They have also driven the unexpected boom of the stock market. Low interest rates attract more investors to stocks. Workers stuck at home tried to trade and the tech giant gained more ground during the shutdown.

On the other hand, the stock market has become a driver of increasing household wealth. which accounted for nearly half of the total increase.

That creates an unbalanced wealth distribution as wealthier households are more likely to own stocks. Household wealth increased by more than 70% to the top 20%, about a third to the top 1

Profits were concentrated at their peak when Americans were grouped by wealth rather than income. (Wealth is calculated by subtracting household debt such as mortgages and college debt. out of assets such as houses and the stock market).

The stay-at-home order sent the economic downturn freely at the start of the pandemic. But that shock proved short-lived.

Americans with high-paying jobs fared particularly well. Many white collar workers can work from home. And they save money by not traveling or eating out. Government stimulus checks and unemployment benefit extensions make restaurant servers Housekeepers, cleaners, etc. are in low-wage service jobs that have been laid off.

Many low-income workers are coming forward. For example, by October 2020, the household checking account balance of 25% of the lowest-income earners has increased about 50% from the previous year. But most of the wealth gains come in the form of stimulus checks and unemployment benefits, according to data from the JPMorgan Chase Institute, which fade as the economy recovers.

And many low-wage jobs are still missing. As of April 2021, jobs paying more than $60,000 were up about 2% compared to January 2020 levels, according to Opportunity Insights, a research group at Harvard University. Jobs that paid less than $27,000 were down nearly 24%.

The most profitable Americans in 2020 are those with more wealth, home accounts, stocks and retirement accounts. which wealthy people tend to own have higher added value And those boosts are likely to last.

Economists did not initially expect this to be the case. Stocks soared

The Fed then lowered interest rates to near zero. Launched a number of emergency lending programs. and began to buy large amounts of government debt Investors flocked to stocks without fear of a standstill in the credit market. A handful of tech giants have benefited from the stay-at-home economy. has brought the whole market higher

In the second half of the year, the S&P 500 set a new record 33 times. The share price increase accounted for nearly 44 percent of the overall growth in household wealth in 2020.

House prices that tended to fall during the recession rose instead. There is already a shortage of houses. But the epidemic has reduced demand and exacerbated shortages.

The median selling price of existing homes exceeded $300,000 last year for the first time and continues to soar, reaching $350,000 in May. Low price increases and rates are a boon for homeowners, many of whom keep cash from their homes or save money by refinancing to a lower interest rate.

Soaring prices have pushed homeowners out of reach for low-income families and first-time buyers. Economists expect moderate price growth in 2021, but house prices won’t fall.

meanwhile The aid that helped Americans get through the past 15 months has begun to fade. States have begun to reduce unemployment benefits. Three months have passed since the last round of stimulus checks. Measures that allow borrowers to defer mortgages and student loan payments are set to expire.

Those who missed out on wealth building during the pandemic are less prepared to deal with the next major financial stress. By 2020, more than a third of adults say they may be suddenly unable to pay $400 in cash. According to the Fed report

write to Orla McCaffrey at orla.mccaffrey@wsj.com and Shane Shifflett at Shane.Shifflett@wsj.com.