Fed: Americans' wealth dropped 40 percent
Posted Monday, Jun. 11, 2012
By the numbers
39 percent: The drop in the median net worth of families from 2007 to 2010.
16 percent: The drop in the median balance that families are carrying on credit cards, from $3,100 in 2007 to $2,600 in 2010.
8 percent: The drop in median income, falling to $45,800 in 2010.
6 percent: The drop in the median value of retirement accounts based on the stock market, to $44,000.
42 percent: The drop in the value of Americans' stake in their homes, to $55,000 in 2010.
BY YLAN Q. MUI
The Washington Post
WASHINGTON -- 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 back in 1992.
The data represent one of the most detailed looks at how the economic downturn altered the landscape of family finance. In 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.
Those findings underscore both 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 long. And so far, the country has seen only a halting recovery.
"It's hard to overstate how serious the collapse in the economy was," said Mark Zandi, chief economist for Moody's 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, cars and stocks minus any debt -- suffered the biggest drops. The wealthiest families, in contrast, saw their median net worth rise slightly.
Americans have tried to rebalance the family budget but have found it difficult to reverse the damage.
Read more here: http://www.star-telegram.com/2012/06/11/4024489/fed-americans-wealth-dropped-40.html#storylink=cpy
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