US Household Net Worth Fell Most on Record in Fourth Quarter

[Purveyor]

Source: Bloomberg

By Timothy R. Homan

March 12 (Bloomberg) -- U.S. household wealth fell by a record $5.1 trillion from October to December, almost 100 percent more than the decrease in the previous quarter, as home values and stock prices plunged, Federal Reserve figures showed.

Net worth for households and non-profit groups decreased to $51.5 trillion, the lowest level in four years, from $56.6 trillion in the third quarter, according to the Fed’s quarterly Flow of Funds report today. The government began keeping quarterly records in 1952.

The erosion of Americans’ wealth is one reason that analysts project households will save more in coming months, restraining spending and economic growth. President Barack Obama’s administration aims to revive an economy in its second year of recession through the $787 billion stimulus package signed into law last month.

“Given tumbling employment, falling household wealth and still-tight credit, it is hard to believe that consumption is already bottoming out,” Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, said before the report.

The report underscores economists’ judgments that consumer spending isn’t in a sustained recovery after better-than- projected results in the first two months of the year.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=atilNtHogT_8&refer=home

[Supersedeas]

1. meanwhile, at CNBC -- cheers and self-righteous indignation

[riverdeep]

2. What did people think was going to happen when they hired Bush in 2000?

How is this a surprise? Everything the guy came into contact with turned into a failure. This time he broke the country.

That was the guy people wanted to have a beer with and who would keep the gays from marrying. Well, you got that. Now, go live in your car. Wasn't it worth it?

[Zynx]

3. For people who think wealth conforms to scientific laws of conservation, here we are.

Wealth can be outright destroyed. It doesn't have to "go" anywhere. For those who think it went overseas, look at global wealth statistics. Trillions are just gone. This isn't an energy or mass issue.

[Demobrat]

4. The wealth was never real.

The debt that was taken out with the imaginary wealth as collateral is, however, all too real.