Monday, June 11, 2012

Americans' Net Worth Down 40 Percent


The Diversity Recession is the gift that keeps on giving.  A decline of more than 42% in home equity has led to the largest decline in twenty years to the net worth of American families according to new data released by the Fed:
The Federal Reserve’s detailed survey of consumer finances showed families’ median wealth plunged from $126,400 in 2007 to $77,300 in 2010 — a 39 percent decline. That put them on par with median wealth in 1992.


3 comments:

Anonymous said...

The Federal Reserve’s detailed survey of consumer finances showed families’ median wealth plunged from $126,400 in 2007 to $77,300 in 2010 — a 39 percent decline. That put them on par with median wealth in 1992.

That's a double whammy. Not only is it a 39% drop, but given the inflationary measures taken over the past 4 years, $77K ain't what it used to be. I find this number hard to believe. But then again, the median net worth of single, black women is $5 (yes, five dollars). So maybe $77K is pretty good.

smoore123 said...

You are right Anonymous. $77K ain't what it used to be. Adjusted for inflation it's about $73.5K. That's a whooping 4.5% increase in the price level over the last 4 years or around 1.1% per year. Now that's some Weimar Republic inflation up in here.

James said...

Now smoore123, you know anonymous wasn't talking about real dollar value. He was clearly referring to what money can buy today for the typical household compared to 2008.

Even though gas prices are down almost 60 cents from their recent high, they are still almost double when Obama took office.

The price of gold has inflated 60+%.

Corn 78%

Sugar 164%

Soybeans 42%

You can find similar cost increases in fruit, eggs, milk, electricity, and soon water in the KC area.

Even if you do calculate real dollar value, you will see it's gone down at annual inflation rate of 2.39%, not the $1 you used. The buying power of a 2009 dollar is equivalent to $1.07 today.

The big problem is those inflation estimates are based on a revolving basket of goods that make assumptions on consumer choices for substitute products that don't typically occur AND they exclude the items that are inflating the most: FOOD and ENERGY, which are spiraling out of control.