It was recently announced the recession is officially over, however that almost seems meaningless. Though recessions are technically over when economic contractions stop, however the depressed state of employment, family riches and property would seem to contradict this idea. Net worth, or household wealth, is the amount of debt owed subtracted from the amount of assets. For instance, say a person owns a home, vehicles, and things of that nature. The entire values of those things, including investments, are the assets. The whole of all charge cards, personal loans, or debt is subtracted from the total value of assets. It isn’t exactly advanced calculus. Net worth for Americans has shrunk considerably over the last few years.
Not so good news for household wealth
The last couple of years are an economic roller coaster. Household wealth has been through those ups and downs too. This summer was dismal, as household wealth over all fell via the floor. The Federal Reserve maintains the data on household wealth, and as outlined by CNN, the Fed lately disclosed that total net worth has declined 2.8 percent over the second quarter of this year. That amounted to $1.5 trillion of instant cash down the drain. The bulk of the shrinking dollar value was lost in the stock market. Mutual funds and retirement savings accounts were also negatively affected. Stocks on the open market were the hardest hit, as individual stocks lost $912 billion over the second quarter.
Property shows a little enhancement
Employment and housing are nevertheless the largest problem areas. The real estate market had the bottom fall out. That said, it is working its way back up. There is actually a little more value in property overall. Housing added $46 billion over the summer. However, this is an improvement of .3 percent. That said, it does not make up for the losses. Between 2007 and 2009, housing as an industry lost $17 trillion. It seems housing and employment are the areas that really need extra cash, but those statistics have not seemed to benefit at all from the cash advanced from stimulus programs.
Recuperation at a snails’
However dismal the news seems, there is almost always a positive corollary. All isn’t lost, by a long shot. According to USA Today, stocks are already rebounding and regaining value. A double dip recession doesn’t seem likely, as slow however steady recovery is expected.
Further reading
CNN
money.cnn.com/2010/09/17/news/economy/household_net_worth/index.htm
USA Today
usatoday.com/money/economy/2010-09-17-net-worth_N.htm
