American households lose $1.5tr

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American households lose $1.5tr

Sat Sep 18, 2010 6:56AM

American households have lost 2.3 percent or $1.5 trillion of their net worth from April to June last quarter, according to the Federal Reserve.


This makes a setback for Americans' efforts to repair finances battered by the recession, Bloomberg reported.

Weak stock portfolios were the biggest force dragging down wealth, and the ailing real estate market was the next major factor for Americans' shrinking wealth, AP reported.

Net worth is the value of assets such as homes, checking accounts and investments, minus debts like mortgages and credit cards.

The economic downturn is taking its toll on many Americans. A near double-digit unemployment rate and declining wages are among the reasons why 40.6 million people live in poverty across the US.

Net worth had been growing slowly for four straight quarters before last quarter's decline. Household net worth had regained about $6.2 trillion in value during the previous four quarters.

Americans' net worth had fallen about 23 percent at the height of the recession. From the middle of 2007 through the start of 2009, Americans have lost about $17 trillion.

The US Census Bureau (USCB) has declared in a report that one out of every seven Americans lives in poverty and the number of working-aged poor is at the highest level it has been in 45 years.

Worried President Barack Obama, who is struggling to get various stimulus bills passed by Congress, now has to deal with the official USCB report that the poverty rate in 2009 was 14.3 percent - up from 13.2 percent in 2008.

MH/TG/MGH