US Household Worth Drops
US Household Worth Drops
The net worth of all US households in the US fell during the second quarter for the first time in a year as a result of declining home values and a downward trend in the stock market. According to a report from the Federal Reserve, total net worth of households and non-profits fell by $149 billion to $58.5 trillion during the quarter, a 1 percent drop on an annual basis. In the previous quarter, net worth grew by 7.4 percent. Housing wealth, meanwhile, fell for the fourth quarter in a row during the April-June quarter.
This erosion of wealth was fueled largely by a decline of $947 billion in real estate assets over the past year, as well as staggering losses on all thee major US stock indexes. And conditions do not seem to be improving, as a weak job market and questionable outlook continue to drive consumers to save, limiting consumer spending, which accounts for 70 percent of the overall economy. Americans are also reducing their overall debt, according to the report, trimming how much they owed collectively for the 12th straight quarter.
Since US household worth reached a historic low of $49.5 trillion in 1Q 2009, it has increased by close to $9 trillion. But it is still about $7.5 trillion below the record high of $65.9 trillion set in June 2007, six months before the country entered its worst economic downturn since the Great Depression. The value of US real estate declined by $98.6 billion in the second quarter, and that followed a decline of $219 billion in housing assets in the first quarter. The value of financial assets, meanwhile, which includes stocks, bonds and pension fund holdings, fell by $139 billion in the three months through June.
The net worth of all US households in the US fell during the second quarter for the first time in a year as a result of declining home values and a downward trend in the stock market. According to a report from the Federal Reserve, total net worth of households and non-profits fell by $149 billion to $58.5 trillion during the quarter, a 1 percent drop on an annual basis. In the previous quarter, net worth grew by 7.4 percent. Housing wealth, meanwhile, fell for the fourth quarter in a row during the April-June quarter.
This erosion of wealth was fueled largely by a decline of $947 billion in real estate assets over the past year, as well as staggering losses on all thee major US stock indexes. And conditions do not seem to be improving, as a weak job market and questionable outlook continue to drive consumers to save, limiting consumer spending, which accounts for 70 percent of the overall economy. Americans are also reducing their overall debt, according to the report, trimming how much they owed collectively for the 12th straight quarter.
Since US household worth reached a historic low of $49.5 trillion in 1Q 2009, it has increased by close to $9 trillion. But it is still about $7.5 trillion below the record high of $65.9 trillion set in June 2007, six months before the country entered its worst economic downturn since the Great Depression. The value of US real estate declined by $98.6 billion in the second quarter, and that followed a decline of $219 billion in housing assets in the first quarter. The value of financial assets, meanwhile, which includes stocks, bonds and pension fund holdings, fell by $139 billion in the three months through June.
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