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Americans' Net Worth Posts First Gain in Nearly 2 Years
Published: Thursday, 17 Sep 2009 * 12:32 PM ET Text Size By: Reuters
U.S. households' net worth rose by $2 trillion to $53.1 trillion in the second quarter, the first increase since before the recession began in 2007, Federal Reserve data showed on Thursday.
The increase in wealth, the first since the third quarter of 2007, came in a period that saw stabilization in the housing market and huge gains in global financial markets. However, even with the $2 trillion rise, household net worth was still well below 2007's level of $63.9 trillion.
The steep drop in wealth has put a damper on consumer spending, which normally accounts for about 70 percent of U.S. economic activity, and has encouraged households to boost savings.
The Fed's quarterly Flow of Funds report also showed households and nonfinancial businesses pared debt, while the federal government piled more on as it stepped up recession-fighting efforts.
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Current DateTime: 09:28:44 17 Sep 2009
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Household debt contracted at a 1-3/4 percent annual rate in the second quarter, the fourth consecutive quarter of decline, reflecting drops in both mortgage debt and consumer credit such as credit cards.
Nonfinancial business debt also contracted at a 1-3/4 percent annual rate, the largest quarterly drop since 1993, according to the Fed. The decline was concentrated in commercial paper, loans, and commercial mortgage borrowing.
The federal government's debt increased at a 28-1/4 percent annual rate in the second quarter. The Obama administration has forecast a record $1.6 trillion budget gap for this fiscal year.
Copyright 2009 Reuters. Click for restrictions.
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ersonal Finance * WealthPrintEmail
Published: Thursday, 17 Sep 2009 * 12:32 PM ET Text Size By: Reuters
U.S. households' net worth rose by $2 trillion to $53.1 trillion in the second quarter, the first increase since before the recession began in 2007, Federal Reserve data showed on Thursday.
The increase in wealth, the first since the third quarter of 2007, came in a period that saw stabilization in the housing market and huge gains in global financial markets. However, even with the $2 trillion rise, household net worth was still well below 2007's level of $63.9 trillion.
The steep drop in wealth has put a damper on consumer spending, which normally accounts for about 70 percent of U.S. economic activity, and has encouraged households to boost savings.
The Fed's quarterly Flow of Funds report also showed households and nonfinancial businesses pared debt, while the federal government piled more on as it stepped up recession-fighting efforts.
RELATED LINKS
Current DateTime: 09:28:44 17 Sep 2009
LinksList Documentid: 32896298
More Living Paycheck to PaycheckHow The Rich Are Saving NowEconomy Shows More Signs of Recovery
Household debt contracted at a 1-3/4 percent annual rate in the second quarter, the fourth consecutive quarter of decline, reflecting drops in both mortgage debt and consumer credit such as credit cards.
Nonfinancial business debt also contracted at a 1-3/4 percent annual rate, the largest quarterly drop since 1993, according to the Fed. The decline was concentrated in commercial paper, loans, and commercial mortgage borrowing.
The federal government's debt increased at a 28-1/4 percent annual rate in the second quarter. The Obama administration has forecast a record $1.6 trillion budget gap for this fiscal year.
Copyright 2009 Reuters. Click for restrictions.
Topics
ersonal Finance * WealthPrintEmail
