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View Full Version : U.S. Household Wealth Declines by $14 Trillion


Mack[_3_]
March 18th 09, 06:27 PM
U.S. household wealth falls $11.2 trillion in 2008
Thu Mar 12, 2009
By Emily Kaiser

WASHINGTON (Reuters) - U.S. households suffered a record 9 percent
drop in wealth and pared debt in the fourth quarter as a deepening
recession battered confidence and finances, Federal Reserve data
showed on Thursday.

Household net worth dropped by $5.1 trillion from the prior quarter to
$51.5 trillion. For the full year, net worth dropped by $11.2
trillion, reflecting steep declines in the housing and stock markets.

The declines in household net worth were the largest since quarterly
and annual records began in 1951 and 1946, respectively, said the Fed
-- the U.S. central bank.

Since a second-quarter 2007 peak of $64.4 trillion, household wealth
has dropped by about 20 percent, effectively wiping out four years of
gains. That has put a chill on consumer spending and added to
Americans' anxiety about their economic well-being.

Michael Feroli, an economist with JPMorgan in New York, called the
$5.1 trillion quarterly drop a "showstopper."

"Given where the S&P 500 (stock index) is now and recent house price
data, we estimate consumers have lost about another $2.5 trillion in
the first quarter of the year," he said.