Americans are quickly getting poorer as the much-touted economic “recovery” remains elusive. Household wealth plummeted by more than four percent from July to September according to a report released last week by the Federal Reserve, marking the steepest drop since 2008 and the second quarterly decline in a row. That represents an average loss of about $21,000 per household in just three months.
At the end of the third quarter, household wealth plunged by $2.4 trillion, from a total of about $60 trillion down to slightly less than $57.5 trillion. The dramatic drop in net worth — the value of all assets minus total debts and liabilities -—was led by still-declining housing prices and crashing stock values.
Despite wild money printing by the Fed in recent years, home values are not expected to recover any time soon. During the third quarter, American real estate assets lost about $100 billion from the previous quarter. And banks are still sitting on an unknown but huge number of foreclosed properties expected to keep prices depressed for years to come.
Stocks performed terribly last quarter, too, though they have recovered some of those losses so far. The S&P500 Index lost around 14 percent from July to September. And according to the Dow Jones U.S. Total Stock Market Index, equities shed $2.6 trillion for the quarter.
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