WAFF Vet Club[Click here to Join WAFF!] WAFF Moderators Forum
General Discussion
(The Den)
The World's Armed Forces Forum History, Politics, Economics, And Religion Forum
Greece & Turkey Defence Forum Europe, Middle East & Africa
Defence Forum
Asia & Pacific Defence Forum
Help, Suggestions & Complaints
   
   
  << Previous Topic | Next Topic >>Forum Index  

Americans saw wealth plummet 40 percent from 2007 to 2010, Federal Reserve says

June 12 2012 at 8:13 PM
E7  (Login E7)
Elite WAFF Vet Club

Americans saw wealth plummet 40 percent from 2007 to 2010, Federal Reserve says

The recent recession wiped out nearly two decades of Americans wealth, according to government data released Monday, with ­middle-class families bearing the brunt of the decline.

The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were in 1992.

The data represent one of the most detailed looks at how the economic downturn altered the landscape of family finance. Over a span of three years, Americans watched progress that took almost a generation to accumulate evaporate. The promise of retirement built on the inevitable rise of the stock market proved illusory for most. Homeownership, once heralded as a pathway to wealth, became an albatross.

The findings underscore the depth of the wounds of the financial crisis and how far many families remain from healing. If the recession set Americans back 20 years, economists say, the road forward is sure to be a long one. And so far, the country has seen only a halting recovery.

Its hard to overstate how serious the collapse in the economy was, said Mark Zandi, chief economist for Moodys Analytics. We were in free fall.

The recession caused the greatest upheaval among the middle class. Only roughly half of middle­-class Americans remained on the same economic rung during the downturn, the Fed found. Their median net worth the value of assets such as homes, automobiles and stocks minus any debt suffered the biggest drops. By contrast, the wealthiest families median net worth rose slightly.

Americans have tried to re­balance the family budget but have found it difficult to reverse the damage.

The survey showed that fewer families are carrying credit card balances, and those who do have less debt. The median balance dropped 16 percent, from $3,100 in 2007 to $2,600 in 2010. The Fed also found that the percentage of Americans who have no debt rose to a quarter of families.

But that progress was undermined by other factors, leaving the median level of family debt unchanged. The report said more families reported taking out education loans. Nearly 11 percent said they were at least 60 days late paying a bill, up from 7 percent in 2007. And the percentage of families saddled with debts greater than 40 percent of their income stayed the same.

Not only were Americans still facing significant debts, but they were making less money. Median income fell nearly 8 percent, to $45,800, in 2010. The median value of stock-market-based retirement accounts declined 7 percent, to $44,000.

But it was the implosion of the housing market that inflicted much of the pain. The median value of Americans stake in their homes fell by 42 percent between 2007 and 2010, to $55,000, according to the Fed.

The poorest families suffered the biggest loss of wealth from the drop in real estate prices. But middle-class Americans rely on housing for a larger part of their net worth. For some, it accounts for just more than half of their assets. That means every step downward is felt more acutely.

Rakesh Kochhar, associate director of research at the Pew Hispanic Center, calls this phenomenon the reverse wealth effect. As consumers watched the value of their homes rise during the boom, they felt more confident spending money, even if they did not actually cash in on the gains. Now, the moribund housing market has made many Americans wary of spending, even if their losses are just on paper.

According to the Fed survey, that paper wealth or what is officially called unrealized capital gains shrank 11 percentage points, to about a quarter of Americans assets.

The findings track research Kochhar released last year that showed a dramatic drop in household wealth during the recession, particularly among minorities. That study found record-high disparities between whites wealth and that of blacks and Hispanics.

It was turning the clock back quite a bit, Kochhar said.

The Feds survey is conducted every three years. Although there have been some signs that the recovery has picked up housing prices have begun to stabilize and unemployment has fallen Fed economists said those improvements largely do not change the survey results.

Recovery from the so-called Great Recession has also been particularly slow, the report said.

http://www.washingtonpost.com/business/economy/fed-americans-wealth-dropped-40-percent/2012/06/11/gJQAlIsCVV_story.html

----------------------------------------------
[linked image]

 
 Respond to this message   
AuthorReply

Brendan
(Login 7keys)
The Canucks (Canada)

Re: Americans saw wealth plummet 40 percent from 2007 to 2010, Federal Reserve says

June 13 2012, 4:11 AM 

But remember folks, all that matters is jobs jobs jobs!

.

 
 
the
(Login the-me)
Satyameva Jayate (India)

Re: Americans saw wealth plummet 40 percent from 2007 to 2010, Federal Reserve says

June 13 2012, 7:10 AM 

There is this talk that middle class income has not increased in real terms since 1970s. Its all fed's phony money balooning. Income inequality is increasing hugely and soon there will be two class of societies.

But of course E17 is safe. His alien masters will take care of him.

 
 
E7
(Login E7)
Elite WAFF Vet Club

...

June 13 2012, 4:32 PM 

And you wonder why you have a reputation for contributing absolutely nothing of substance to any thread you take part in? wink.gif



----------------------------------------------
[linked image]

 
 
the
(Login the-me)
Satyameva Jayate (India)

Re: Americans saw wealth plummet 40 percent from 2007 to 2010, Federal Reserve says

June 14 2012, 7:05 AM 

Reputation with who? Conspiracy alien you and insight-Ninoo?

 
 
E7
(Login E7)
Elite WAFF Vet Club

...

June 14 2012, 6:13 PM 

[linked image]

----------------------------------------------
[linked image]

 
 
the
(Login the-me)
Satyameva Jayate (India)

Re: Americans saw wealth plummet 40 percent from 2007 to 2010, Federal Reserve says

June 15 2012, 8:40 AM 

17 the cupcake,
[linked image]

 
 
E7
(Login E7)
Elite WAFF Vet Club

,...

June 15 2012, 8:10 PM 

That's right.. I do see dumb people.. they are muslim pakistanis trying to disguise themselves as indians.. wink.gif

----------------------------------------------
[linked image]

 
 
 
  Respond to this message   
  << Previous Topic | Next Topic >>Forum Index  
WAFF recommends these sites

Indian Defence Analysis      [Definitive Lapse of Reason]