It was recently announced the recession is officially over, but that almost seems meaningless. Though recessions are technically over when economic contractions stop, however the depressed state of employment, family wealth 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. Things like investments are integrated as assets. Then you subtract liabilities. That consists of debt, like credit cards and unsecured loans. It’s not exactly advanced calculus. Net worth for Americans has shrunk considerably over the last very few years.
Rapidly declining home worth
The last few years have taken a toll on the economy, including household wealth. This summer was dismal, as household wealth over all fell via the floor. The Federal Reserve, as outlined by CNN, lately reported that after all debts, the net worth among all Americans had dropped 2.8 percent. That amounted to $1.5 trillion of instant money 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. Over the summer, the bulk of losses were from individual stocks, which declined by $912 billion.
At least property is beginning to improve
Employment is down, however property was where the hugest losses occurred. Real estate, despite the bottom having practically fallen out, is slowly working its way back up. There is really just a little more value in property overall. Housing added $46 billion over the summer. It is a gain of only .3 percent. At least it is something, though. However, it pales in comparison to the $17 trillion property as an industry lost between 2007 and 2009. Lawmakers have known that these are areas that need extra cash, however the cash advanced to help out has had little effect.
Come back starting
Lots of economic news seems bad. There is some good news though. All isn’t really lost, by a long shot. According to USA Today, stocks are already rebounding and regaining value. The economy seems to be recovering slowly but surely, and a double dip recession does not seem too likely.
Additional 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
