A new report from the Federal Reserve shows that the financial damage from the Great Recession continues to batter American families. The Flow of Funds survey says the total household worth fell 4.1 percent to $57.353 trillion in the third quarter, the second consecutive quarterly decline.
Although the market rallied in the fall — we’ll see if this continues — household financial assets, which includes stocks and mutual-fund holdings, sank 5.3 percent to $47.737 trillion. Holdings of real estate rose fractionally to $18.2 trillion, but that’s still 1.2 percent lower than in the previous year’s third quarter. Meanwhile, companies continue to hoard cash and other liquid assets: Those increased to $2.1 trillion, the fifth straight quarterly gain. Data geeks can download the entire report here.
The bottom line is yet more evidence that average Americans continue to struggle to recover from the downturn. Household debt fell a bit, but there’s much more deleveraging yet to go. Among other things, this adds to the uncertainty of how the holiday shopping season will play out. For the 99 percent, we’re a poorer nation than before the great crash. Washington, D.C., is politically paralyzed and doing nothing to address this.
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Today’s Econ Haiku:
Being Jon Corzine
Means you might say you’re sorry
Avoid the slammer