(Updates with analyst comments)

WASHINGTON -(Dow Jones)- Americans got richer for a third straight quarter at the end of 2009, a favorable trend for an economic recovery that could use some more fuel.

A quarterly Federal Reserve report Thursday said U.S. households' total net worth climbed 1.3% in the fourth quarter, to $54.18 trillion from the third quarter's $53.49 trillion. Household debt fell and stock market assets rose.

For 2009 as a whole, net worth rose 5.4%.

Household net worth is assets, such as home equity, minus liabilities, such as mortgage debt. The 1.3% gain, the third quarterly increase in a row, is promising for an economy recovering slowly from recession because of high joblessness and restrained consumer spending.

"The headwinds consumers were facing during the financial crisis have turned around," said Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi. "We aren't completely out of the woods yet as unemployment remains high, but the consumer wealth is being rebuilt and this will make them more confident about the future."

The soft spots of the economy were suggested in the Fed's "Flow of Funds" data. While net worth rose, U.S. non-financial debt growth slowed again. It climbed 1.6%, compared to the third-quarter's 2.9% gain and second quarter's 4.5%. Private debt contracted in the fourth quarter, while government debt expanded at a less vigorous rate.

The severe recession and financial meltdown of 2008 turned Americans cautious over their finances. They've increased their saving. Also, credit-card use has gone down 16 straight months, Fed data last week showed.

Consumer spending makes up a big part of the economy in the U.S., so the conservatism is quelling the recovery. Long term, though, reducing debt is good for balance sheets. The thinking is, it will lead to a stronger consumer and overall economy.

"This is going to help consumer spending and is likely to make this economic recovery a more durable and lasting one," Rupkey said.

The stock market bottomed a year ago, along with net worth. The 1.3% increase in fourth-quarter net worth included gains in corporate equities, household real estate, and mutual fund shares, the "Flow of Funds" data said.

Household net worth rose to about 4.90 times disposable personal income in the fourth quarter from a third-quarter level of about 4.89 times income.

U.S. household debt fell at a 1.2% annual rate in the fourth quarter, compared to the 2.7% drop in the third quarter.

For all of 2009, household debt tumbled 1.7%--the first annual drop since the Fed's records began in 1945.

Business debt dropped 3.2% in the fourth quarter, compared to a 2.3% drop in the third quarter.

The federal government's debt grew at a 12.6% rate in the fourth quarter, down from the third quarter's growth of 20.6%. State and local government debt rose 4.7%, compared to 5.5% in the third quarter.

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