Household wealth falls and everybody may need additional money

Given the dismal state of the economy in some sectors, recent revelations of the economic recession being over seem to ring hollow. Though recessions are technically over when economic contractions stop, but the depressed state of employment, family wealth and real estate would seem to contradict this idea. The value of assets minus the amount of owed debt is how household wealth, or net worth, is determined. Assets are everything an individual owns. The amount of debt a person or family holds in personal loans and credit cards are counted against assets. Whatever is left over is the wealth of a household. Net worth is almost at an all time low.

Net worth does not look great

Household wealth has been on a roller coaster ride throughout the last couple of years. The summer has not been good to numerous people. Family riches took a serious tumble. The Federal Reserve maintains the data on household wealth, and according to CNN, the Fed just lately disclosed that total net worth has declined 2.8 percent over the second quarter of this year. That amounted to $1.5 trillion of instant money down the drain. Most of the evaporated value was held in stocks, mutual funds and retirement savings. Stocks on the open market were the hardest hit, as individual stocks lost $912 billion over the second quarter.

Property is a plucky sector

Employment is down, however property was where the hugest losses occurred. After a near nuclear winter, real estate is beginning to slowly improve. Real estate values have increased by $46 billion. However, this is an improvement of .3 percent. Nevertheless, it pales in comparison to the $17 trillion property as an industry lost between 2007 and 2009. It seems housing and employment are the areas that really need extra cash, however those statistics have not seemed to benefit at all from the cash advanced from stimulus programs.

Very slow but steady wins the race

Some good news has come out of all this, though. According to USA Today, stock markets have already begun to gain lost value back. The economy is apparently recovering slowly but surely, and a double dip recession does not seem too likely.

Additional reading

CNN

money.cnn.com/2010/09/17/news/economy/household_net_worth/index.htm

USA Today

usatoday.com/money/economy/2010-09-17-net-worth_N.htm