Thursday, September 23, 2010

Everybody may need additional money as family prosperity drops

It was most recently announced that the recession is officially over, however that almost seems meaningless. The economic recession may be technically over as the downward slide has stopped, however employment, real estate and household wealth are all nevertheless depressed. The value of assets minus the amount of owed debt is how household wealth, or net worth, is determined. Assets are everything an individual owns. Then you subtract liabilities. That contains debt, like charge cards and unsecured loans. Whatever is left over is the wealth of a household. Net value for Americans has shrunk considerably over the last very few years.

Home wealth plummeted

The last few years have taken a toll on the economy, including household wealth. The summer has not been good to many people. Family riches took a severe tumble. The Federal Reserve, as outlined by CNN, most recently reported that after all debts, the net worth among all Americans had dropped 2.8 percent. That’s a small percentage, but the dollar amount isn’t. It amounts to $1.5 trillion of instant cash gone. The bulk of the shrinking dollar value was lost in the stock market. Mutual funds and retirement savings accounts were also negatively affected. Stocks on the open market were the hardest hit, as individual stocks lost $912 billion over the second quarter.

Property shows a little improvement

Employment is down, but real estate was where the hugest losses occurred. The real estate market had the bottom fall out. That said, it is working its way back up. There is really just a little more value in property overall. Housing added $46 billion over the summer. It is a gain of only .3 percent. At least it is something, though. Nevertheless, it pales in comparison to the $17 trillion property as an industry lost between 2007 and 2009. Lawmakers have known that these are areas that need extra money, however the money advanced to help out has had little effect.

Recuperation is taking place

Some good news has come out of all this, though. 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.

More on this topic

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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