Great Recession Shrank U.S. Families' Wealth to 1992 Levels, Says Fed

Family WealthBy MARTIN CRUTSINGER

WASHINGTON -- The Great Recession shrank Americans' wealth so much that in 2010 median family net worth was no more than it had been in 1992 after adjusting for inflation, the Federal Reserve reported Monday.

Median net worth declined from $126,400 in 2007 to $77,300 in 2010, a Fed survey of family finances found. The median marks the point where half had more and half had less. The recession officially began in December 2007 and ended in June 2009.

Net worth is the value of assets like homes, bank accounts and stocks, minus debts like mortgages and credit cards

The Fed's findings are in its latest Survey of Consumer Finances, a comprehensive review of household finances that the Fed has done every three years dating to 1989.

The Fed's survey of consumer finances contains information only through 2010. A separate survey the Fed released last week showed that total family net worth climbed 4.7% in the January-March quarter to $62.9 trillion, about 28% above its recession low. The increase was fueled by stock market gains.

Those gains put net worth about 5% below its pre-recession peak of $66 trillion. But since the first quarter ended, lower stock prices have eroded some household wealth.

The Fed's more detailed Survey of Consumer Finances is done every three years. The latest survey showed Monday that much of the drop in net worth from 2007 to 2010 reflected the collapse of the housing market, which drove down home values.

Among families that owned homes, the Fed survey found that their median home equity declined from $95,300 in 2007 to $55,000 in 2010, a drop of 42.3%. Home equity is the home's value minus how much is owed on the mortgage.

The Fed survey found that median incomes fell from $49,600 in 2007 to $45,800 in 2010, a drop of 7.7%.

The Fed survey found that the proportion of families carrying a credit card balance fell to 39.4% in 2010. That was down 6.7 percentage points from 2007. Among families with a credit card balance, the median balance fell from $3,100 in 2007 to $2,600 in 2010, a drop of 16.1%.

The proportion of families with debt that had a debt payment that was late by 60 or more days during 2010 rose to 10.8%, up from 7.1% in 2007.


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Artie

We have a systemically flawed system of Government in this country. The MAJOR problems that exist are not simply a matter of liberals vs. conservatives or capitalists vs. socialists. These characterizations are useless as there is a common sense middle ground. The much bigger problem is that our Government has literally been hijacked and corrupted by “banksters,” lobbyists and “big money” special interests. Unbridled greed and maintaining a destructive and unacceptable status quo continues. We presently have a government that is becoming more contentiously divided and can't pass any 'real' and much needed legislation. The best interests of the majority of the people of this country and especially the middle class are not represented. One just has to look at the failure of the banking and financial system and the recent trillion dollar taxpayer funded bail-out as just one example. There are many other examples that can be seen in industries such as health care, defense, education and energy. Our national debt is off the chart and growing. Until such time that money (lobbying) is removed from the political process, you can expect things to just get worse. The country will become further divided both politically and economically. Our great “experiment” in democracy will ultimately fail and the country will go the way of the Roman Empire. We need to get this country back on track. We need a government that actually represents that interests and values of the majority of the taxpaying and working people in this country and bring back “common sense” values. If you feel this way, I would encourage you to join other like-minded individuals by becoming a member of “The Alliance.”
http://www.dylanratigan.com/alliance/

June 13 2012 at 8:40 PM Report abuse -1 rate up rate down Reply
ha6ai

It was toughest on the "richest" 10% who lost most in earnings and net worth (both percentage and total amounts) than the first 90%. (Both real estate and securities collapsed between 2007 and 2010).

June 13 2012 at 3:28 AM Report abuse +1 rate up rate down Reply
1 reply to ha6ai's comment
chris1011

Yes, lets all weep for the richest 1%. Let's send them more in the form of tax advantages, subsidies and outright gifts.

June 13 2012 at 3:53 PM Report abuse -1 rate up rate down Reply
gmydogbud

We voted for "Hope & Change & now we are left with change in our pockets!

June 12 2012 at 7:04 PM Report abuse +3 rate up rate down Reply
1 reply to gmydogbud's comment
chris1011

And the Senate passed a bipartisan infrastructure bill...which the house obstructed. The GOP is beginning to show signs of coming back to earth. People are starting to have conversations such as "is it patriotic to sink the economy, increase unemployment, increase poverty, provide less assistance to citizens, and side more with corporations/the wealthy, just to get Obama out of the White House"?
Congress will be held accountable if they keep actively and passively obstructing and making things worse..just so they can win. Mitt is openly advocating this type of behavior ..and the average citizen is starting to get pissed. Mitt doesn't care, but clearly Jeb Bush, Lindsay Graham, James Inhofe and others are beginning to question the direction of their own party.

June 12 2012 at 10:07 PM Report abuse -3 rate up rate down Reply
2 replies to chris1011's comment
ha6ai

What nonsense! Obama entirely owns this economy. His "budget" was voted down by 99 Senators (that's "bipartisan" - LOL!).

June 13 2012 at 3:30 AM Report abuse rate up rate down
chris1011

Yes, ha6ai, you're full of nonsense alright. A budget is not an infrastructure bill. Back to kindergarten for you. There will always be battles over budgets, but that does not prevent the country from running just fine. We've had many administrations, both Dem and Repub with no budgets that anyone could agree on.

June 13 2012 at 3:52 PM Report abuse rate up rate down
krzyston

According to M. Friedman, Wealth is waht drives all economic activity. Until this trend is reversed growth and unemplyment will not budge. Alexander Krzyston

June 12 2012 at 11:59 AM Report abuse rate up rate down Reply
1 reply to krzyston's comment
chris1011

Wealth did not disappear. It's still all there, concentrated in the top, but nevertheless still all there. Nobody threw bundles of greenbacks into the ocean. Make something useful that the rich want to buy, and you can transfer some of that wealth back down. That's how it has always worked.

June 12 2012 at 1:41 PM Report abuse +1 rate up rate down Reply
1 reply to chris1011's comment
chris1011

Nobody printed trillions. Get a clue. The value of the dollar has not fallen with respect to any other currency. What we have done is not print, but borrowed because the rates are so low. And the largest recipient of treasuries is the American people. They own the largest share of treasuries sold.

June 12 2012 at 5:15 PM Report abuse -1 rate up rate down
johndson

Our economy is 70% consumer based, and that number has not vairied. When the consumer makes the same or less, the economy stagnates. When consumers lose their equity, and their earnings go south, the economy goes south as well. Fixing banks does not fix the consumer. Fixing industries or giving them taxbreaks may improve their bottom line and profitability, but it does NOT improve the consumers situation, or translate into more jobs. Going on a witch hunt to eliminate unions (foramlly 15% of all workers, now less than 9%) is another disasterous failed policy. When the consumers ability to consume is attacked on all fronts, when their earnings are the same or less, when their wealth diminishes, while inflation continues to march forward. We can now clearly see just how the weakness of that 70% of our economy, paralizes economic recover. Without 70% of our population making their weekly purchases, and having the disposable cash to do so, the economy cannot move forward or recover. As the wealthly get wealthier, less consumer money goes into the economy, not more. As the middle class shrinks, less money goes into the economy not more. This cannot be sustained. It is an economic model that has failed on every level, sans the uber-wealthy. Time to "fix" the consumers ability to consume, and stop supporting supplyside ideology. We tried it and it really, REALLY does not work.

June 12 2012 at 10:41 AM Report abuse +1 rate up rate down Reply
Big John

Like Bush said,"Mission Accomplished". Bush did more for the rich and the top 5% in this country than any president in history. The rich think the middle class in this country are to wealthly and they are doing everything they can so you do pass it along to your kids. Wake up America and stop listening to the rich tell you over and over how you should vote and destroy yourselves.

June 12 2012 at 9:27 AM Report abuse +1 rate up rate down Reply
harri85274

So tell me, if we are at the 1992 level, how come we are suffering under the 2012 level cost wise?. Everyting from soup to nuts keeps going up...why doen't the government put a motorium on ALL prices, until we recover?

June 12 2012 at 9:08 AM Report abuse +1 rate up rate down Reply
2 replies to harri85274's comment
ilm9p

Nixon already tried that horseshit, Ace. It didn't work.

June 12 2012 at 9:32 AM Report abuse +2 rate up rate down Reply
gmydogbud

They won't do that because while they tell us that the Cost of Living Has NOT GONE UP, At The Same TimeThey Gave Themselves "Cost Of Living" Increases, to the tune of Thirty -six Thousand Dollars Per Year , while they LIE To We American Citizens!!

June 12 2012 at 7:10 PM Report abuse rate up rate down Reply
joey

Yes Thank you NOBAMA!!!!! keep blameing the world......Put back the mirrors in the white house...GONE 2012 cant come soon enough.............

June 12 2012 at 8:43 AM Report abuse rate up rate down Reply
1 reply to joey's comment
Big John

Please don't pass that kool-aid to anyone else.

June 12 2012 at 9:28 AM Report abuse rate up rate down Reply
democracks0

In the words of the DNC chair Debbie Wasserman Schultz "This is the Obama ecomomy and he owns it"!

Obamas a fiasco.

June 12 2012 at 12:06 AM Report abuse +4 rate up rate down Reply
2 replies to democracks0's comment
jdykbpl45

Obama: No hope, No Change, and always blame. (Someone else).

June 12 2012 at 9:20 AM Report abuse +1 rate up rate down Reply
maceandemma

Reality has little place in your life.
http://t1.gstatic.com/images?q=tbn:ANd9GcQYHVqgNA2RNLfIScWQQMWZmv1xxrmaKfUmevV0NoYDcd38Dl5xjw

June 12 2012 at 4:49 PM Report abuse rate up rate down Reply