According to data released by the Federal Reserve, median American family net worth fell by 39 percent in over 3 years, positioning Americans nearly on parity with their wealth in 1992. The figure, which was $126,400 in 2007, was noted at $77,300 in 2010, the data revealed Monday after adjusting all figures for inflation.
The decline in American family wealth is being attributed to the economic recession the country witnessed over the last few years. Economists believe that the economic crisis washed away almost twenty years of American wealth, with the middle class being the ultimate target of the wealth plunge.
The Fed. also said that the crash of accommodation costs unswervingly accounted for 3-quarters of the loss. Moreover, the retirement pledge put up on the certain climb of the stock market came out misleading for the majority.
The latest data came from the Federal Reserve’s much-awaited publication on Monday of its Survey of Consumer Finances, a document made public every 3 years. It is pertinent to mention here that the Fed’s report is one of the broad and deep sources of data about the economic wellbeing of American families.
“It fills in details to a picture that we already knew was quite ugly, and these details very much underscore that,” said Jared Bernstein, an economist at the Center on Budget and Policy, according to the NY Times. “It makes clear how devastating this has been for the middle class.”
According to economic experts, the report underlines the profundity of the gashes of the economic recession and shows that many families still stay far away from financial healing. It is also being feared that the economic crisis put Americans back twenty years and the future is certain to be a protracted one.
The report also revealed that only about half of middle-class families stayed on the equal economic step throughout the downturn. Their median net worth — which takes into account the worth of properties such as homes, automobiles and stocks less any liability — underwent the major drops. However, it also revealed that the wealthiest families’ median net value climbed up to some extent.
“It’s hard to overstate how serious the collapse in the economy was,” said Mark Zandi, chief economist for Moody’s Analytics, according to a report in the Washington Post. “We were in free fall.”