The recent proclamation of the recession being over seems dubious at best, as numerous sectors are still depressed. Though recessions are technically over when economic contractions stop, but the depressed state of employment, family prosperity 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. Assets are every little thing an individual owns. The amount of debt a person or family holds in personal loans and credit cards are counted against assets. It could be complicated to get the value of all the things a person owns. That said, once that is added up, net value is easy to determine. Net worth for Americans has shrunk considerably over the last few years.
Household prosperity shrinks
Household wealth has been on a roller coaster ride throughout the last couple of years. This summer was dismal, as household wealth over all fell via the floor. Household wealth, as outlined by CNN, dropped 2.8 percent. The data is compiled by the Federal Reserve. Over $1.5 trillion of instant cash disappeared. Negative effects were mostly felt by the stock market, though mutual funds and retirement savings were also hit. The bulk of losses occurred in stock markets. Individual stocks overall lost $912 billion over the summer.
At least real estate is beginning to improve
Employment and housing are nevertheless the largest problem areas. Real estate, despite the bottom having practically fallen out, is slowly working its way back up. Within the second quarter of this year, there was a growth of $46 billion in real estate. Of course, the gain is only .3 percent, but a gain nonetheless. That said, it doesn’t 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 cash advanced from stimulus programs.
More tortoise than hare
However dismal the news seems, there is almost always an optimistic corollary. The stock markets are already rallying, according to USA Today. A double dip recession doesn’t seem likely, as slow however steady recovery is expected.
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
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