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.
Real estate is really a plucky field
There are two huge problem areas in the recession. Real estate, where it all began, and employment. Real estate, despite the bottom having practically fallen out, is slowly working its way back up. There is actually a little more value in real estate overall. Housing added $46 billion over the summer. It is a gain of only .3 percent. At least it is something, though. Overall, the real estate industry lost $17 trillion between mid 2007 to the end of 2009. It seems housing and employment are the areas that really need extra money, but those statistics have not seemed to benefit at all from the cash advanced from stimulus programs.
More tortoise than hare
However dismal the news seems, there is almost always a positive corollary. According to USA Today, stock markets have already started to gain lost value back. The economy seems to be recovering slowly but surely, and a double dip recession doesn’t 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
