It was just lately announced the recession is officially over, but that almost seems meaningless. Though recessions are technically over when economic contractions stop, but the depressed state of employment, household riches and real estate would seem to contradict this idea. Household wealth is a measure of value held. Also called net worth, it is defined as assets held minus debt owed. For example, say an individual owns a home, automobiles, and things of that nature. The whole values of those things, including investments, are the assets. Then you subtract liabilities. That involves debt, like credit cards and unsecured loans. It could be complicated to get the value of all the things an individual owns. That said, once that is added up, net worth is easy to determine. Net worth for Americans has shrunk considerably over the last very few years.
Household wealth decreases
The last few years have taken a toll on the economy, including household wealth. The summer has not been good to many individuals. Family wealth took a serious tumble. Household wealth, as outlined by CNN, dropped 2.8 percent. The data is compiled by the Federal Reserve. That’s a small percentage, however the dollar amount is not. It amounts to $1.5 trillion of instant money gone. 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.
The small housing market which could
Employment is down, but property was where the hugest losses occurred. The real estate market had the bottom fall out. That said, it is working its way back up. Real estate values have increased by $46 billion. Given, the gain is only .3 percent, however a gain nonetheless. That said, it does not make up for the losses. Between 2007 and 2009, housing as an industry lost $17 trillion. It seems housing and employment are the areas that really need extra money, however those statistics have not seemed to benefit at all from the money advanced from stimulus programs.
Come back beginning
Some good news has come out of all this, though. According to USA Today, stock markets have already started to gain lost value back. The economy seems to be recovering slowly however surely, and a double dip recession doesn’t seem too likely.
Find more info on this subject
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
