US household wealth down in second successive quarter
09 Dec 2011
US household wealth took its biggest hit since the height of the 2008 financial meltdown in the third quarter, as stocks weakened due to a downturn, a report issued yesterday said.
According to the Federal Reserve, the net worth of households was down by $2.2 trillion, or 4.1 per cent, to end at $57.4 trillion and in terms of per US resident the decline averaged about $7,800.
This comes as the biggest decline since the $5.6-trillion loss suffered in the fourth quarter of 2008.
The drop in stocks in the quarter explained the overall decline in net worth, as the value of stocks held directly or indirectly was down by $3.2 trillion, or 17 per cent.
This comes as a little worse than the 14 per cent fall in the blue-chip Standard & Poor's 500 index in the quarter. The period saw the US credit rating downgrade by S&P as also increasing worries over the risk of a new US recession and a new meltdown in the financial sector due to the European debt crisis.
However, US stocks had performed well since the end of the third quarter, with the S&P 500 rebounding by 10.1 per cent so far.
.webp)
