Many close to recouping lost wealth
WASHINGTON (AP) -- Americans’ wealth dipped about 0.5 percent in the April-June quarter as a drop in stock prices more than offset a gain in home values.
Yet since June, a resurgent stock market has jumped about 7 percent, more than reversing last quarter’s 3 percent drop in stock prices. And it’s brought many Americans closer to regaining the wealth they lost to the recession -- if they managed to keep their home and have invested in stocks.
Rising wealth could give many people and businesses the confidence to step up spending and boost U.S. economic growth and job creation. That’s a key goal of the bond-buying plan the Federal Reserve unveiled last week. The Fed hopes to drive interest rates down and stock prices up.
Household net worth fell to $62.7 trillion in the April-June quarter, according to a Federal Reserve report released Thursday. A 2.1 percent increase in home values added $355 billion. But the value of stock holdings fell about $600 billion.
Household wealth, or net worth, reflects the value of assets like homes, bank accounts and stocks minus debts like mortgages and credit cards. It peaked before the recession at $67.4 trillion.
Americans’ net worth has risen 22.5 percent from its low of $51.2 trillion reached in early 2009, in the depths of the recession. But it’s still about 7 percent below the pre-recession peak.
Bill Hampel, chief economist at the Credit Union National Association, calculates that Americans will add $1.5 trillion to $2 trillion to their net worth in the current July-September quarter. That would bring their net worth to about 4.3 percent below its pre-recession peak.
"We’re not there yet, but we’re getting close," Hampel said. "Households are rebuilding their capacity to spend."
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