David Kirkpatrick

December 11, 2009

Americans richer — on paper

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 3:58 pm

As far as this goes, it’s good news. It’s also a nice reminder that a lot of personal economic woes are purely paper losses (and then gains when things start rebounding like right now.) Not to understate the real pain being felt out there, but when the media starts tossing gigantic numbers around it’s always a good idea to keep a little perspective.

From the first link:

Americans got wealthier for a second straight quarter in the fall, thanks to gains in stock investments and home values.

Net worth — the value of assets such as homes, bank accounts and investments, minus debts like mortgages and credit cards — rose 5% from the second quarter to $53.4 trillion, the Federal Reserve said Thursday.

Yet even with that gain, Americans’ net worth remains far below the revised peak of $64.5 trillion reached before the recession began. That underscores the vast loss of wealth over the past two years. Net worth would need to rise an additional 21% just to return to its pre-recession peak.

And many analysts don’t expect a repeat of the strong second- and third-quarter gains anytime soon. That’s why Scott Hoyt, senior director of consumer economics at Moody’s Economy.com, thinks household wealth won’t match its pre-recession peak until about 2012.

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