Archive for Friday, June 11, 2010

Americans rebuilding wealth slowly, unevenly

June 11, 2010

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— The rebuilding of Americans’ wealth is proceeding in steps rather than strides.

Households’ net worth rose last quarter — the fourth straight quarterly gain. Yet tumbling stock prices have reduced their wealth since then. Some economists say Americans’ net worth may now be down slightly for the year. That helps explain why many say it will 2012 or 2013, at best, before Americans’ wealth will return to its pre-recession levels.

Net worth — the value of assets like homes, bank accounts and investments, minus debts like mortgages and credit cards — rose 2.1 percent last quarter, the Federal Reserve said Thursday. It now amounts to $54.6 trillion.

In the midst of the recession, household net worth sank as low as $48.3 trillion. It’s since risen 13 percent. Yet even counting last quarter’s gain, net worth would have to rise 21 percent more to regain its pre-recession peak of $65.9 trillion.

Household wealth is vital to the economy because consumers tend to spend according to how wealthy they feel. And their spending accounts for about 70 percent of the economy.

During the recession, sinking home equity and stock prices made shoppers skittish. If they become more nervous about their finances, the economic rebound could weaken or stall.

Over the past several quarters, the growth of net worth has been uneven. Last quarter’s 2.1 percent increase exceeded the 0.9 percent increase in the fourth quarter of last year. But it fell well short of the 4.1 percent rise in the second quarter of 2009 and the 5.4 percent gain in the third quarter.

As Americans have gradually recovered some of their wealth, many of them — especially the affluent — have been spending more. But the housing and stock markets remain fragile. That’s why most consumers aren’t spending as freely as they typically do in the early phases of recoveries.

Comments

Richard Heckler 4 years, 10 months ago

It's is odd that republicans go to any length to deny their choices have taken our country down the tubes.

Repubs scream tax cuts then force taxpayers to bail out mismanaged corporations

Repubs scream tax cuts then march off to war for oil aka trillion dollar subsidies

Repubs scream tax cuts then they won't leave the big government payroll with socialized medical insurance.

Repubs scream out tax cuts yet the country has lost millions of jobs = tax cuts do not create new industry nor new jobs

Repubs scream out tax cuts yet Jeb Bush, George Bush Sr., and his son Neil Bush have all been implicated in the Savings and Loan Scandal, which cost American tax payers over $1.4 TRILLION dollars (note that this is about one quarter of our national debt).

Repubs scream out tax cuts yet Jeb Bush defaulted on a $4.56 million loan from Broward Federal Savings in Sunrise, Florida. After federal regulators closed the S&L, the office building that Jeb used the $4.56 million to finance was reappraised by the regulators at $500,000, which Bush and his partners paid. The taxpayers had to pay back the remaining 4 million plus dollars.

Repubs scream out tax cuts yet Neil Bush was the most widely targeted member of the Bush family by the press in the S&L scandal. Neil became director of Silverado Savings and Loan at the age of 30 in 1985. Three years later the institution was belly up at a cost of $1.6 billion to tax payers to bail out.

Repubs have never cut taxes NOR big government spending.

Repubs cannot live without big government tax dollars yet they spread the same old lies about wanting tax cuts and smaller government.

In essence repubs are full of crap.... face it!

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