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U.S. Household Net Worth Had Record Decline in Fourth Quarter

Posted By admin On March 13, 2009 @ 12:57 pm In Money Watch | Comments Disabled

Timothy R. Homan
Bloomberg News [1]
Friday, March 13, 2009

March 13 (Bloomberg) — U.S. household wealth fell by a record $5.1 trillion from October to December, almost twice the decrease in the previous quarter, as home values and stock prices plunged, Federal Reserve figures showed.

Net worth for households and non-profit groups decreased to $51.5 trillion, the lowest level in four years, from $56.6 trillion in the third quarter, according to the Fed’s quarterly Flow of Funds report yesterday. Wealth dropped $11.2 trillion in 2008 from the year before, the biggest annual decline since the government began keeping quarterly records in 1952.

The erosion of Americans’ wealth is one reason that analysts project households will save more in coming months, restraining spending and economic growth. President Barack Obama’s administration aims to revive an economy in its second year of recession through the $787 billion stimulus package signed into law last month.

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U.S. Household Net Worth Had Record Decline in Fourth Quarter  obamadecept 340x169 [2]

“I don’t think it’s any surprise that wealth has declined so much given the bad news out of markets and house prices,” said Jonathan Basile, an economist at Credit Suisse Holdings USA Inc. in New York. “This decline in wealth is a headwind for spending and it’s a big reason to be cautious and to save.”

Household net worth has fallen in five consecutive quarters for a loss of $12.8 trillion during that period. The decline almost matches the total size of the U.S. economy, which was $14.2 trillion in the last three months of 2008.  

Full story here. [1]


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[1] Bloomberg News: http://www.bloomberg.com/apps/news?pid=20601213&sid=aaRlfL4VyFwU&refer=home

[2] Image: http://www.prisonplanet.tv/subscribe.html

[3] U.S. Household Worth Fell by $1.3 Trillion in First Quarter: http://www.prisonplanet.com/us-household-worth-fell-by-13-trillion-in-first-quarter.html

[4] Household Net Worth Plunges By Most Since Q4 2008, As Government Borrowing Surges: http://www.prisonplanet.com/household-net-worth-plunges-by-most-since-q4-2008-as-government-borrowing-surges.html

[5] U.S. Economy in 2nd Straight Quarter of Steep Decline: http://www.prisonplanet.com/us-economy-in-2nd-straight-quarter-of-steep-decline.html

[6] Exxon Mobil Profits Set a Record in Third Quarter: http://www.prisonplanet.com/exxon-mobil-profits-set-a-record-in-third-quarter.html

[7] Home Prices for 20 U.S. Cities Decline Most on Record: http://www.prisonplanet.com/home-prices-for-20-us-cities-decline-most-on-record.html

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