Study: Household Wealth Has Yet to Rebound from Great Recession
A new report by the Federal Reserve Bank of St. Louis finds that average U.S. household has regained less than half (45%) of the wealth lost during the Great Recession.
The new study stands in contrast to a March Federal Reserve report that claimed the nation as a whole recouped 91% of wealth lost.
The reason for the difference: the new study adjusted for inflation and averaged across the U.S. population.
A look inside the new study’s numbers reveals an even bleaker picture. Almost two-thirds of household wealth since 2009 is attributed to the soaring stock market, but the wealthiest 10% of Americans control 80% of stocks—an indication that middle-income Americans are still struggling to regain massive hits to their wealth.
Moreover, home prices are still down 28% from 2006.
In 2007, average U.S. household net worth was $641,000. As of last year, that figure stood at just $539,000.
“Clearly, the 91% recovery of wealth losses portrayed by the aggregate nominal measure paints a different picture than the 45% recovery of wealth losses indicated by the average inflation-adjusted household measure,” said the report. “Considering the uneven recovery of wealth across households, a conclusion that the financial damage of the crisis and recession largely has been repaired is not justified.”