Household Wealth Fell 18 Percent Last Year
Americans lost 18 percent of their wealth last year, the biggest loss since the government began tallying net worth in 1952.
Household wealth dropped by $11 trillion—an amount that equals the combined annual output of Germany, Japan and the United Kingdom, according to the Wall Street Journal. “The data signal the end of an epoch defined by first and second homes, rising retirement funds and ever-fatter portfolios,” the story said.
Almost half of the losses occurred in the last three months of the year, the Washington Post reports.
The wealthiest Americans bore the brunt of the losses, since they own more stocks and bonds, according to the New York Times. Only about half of American households own stock. But these families have a disproportionate impact on spending; the Times cites Citigroup figures showing that the top 20 percent of income earners spend more than the bottom 60 percent.
David Backus, an economics professor at New York University, put the loss in perspective for the Wall Street Journal. “What’s misleading about this being the biggest drop is that it was preceded by one of the biggest rises,” he said. “Even where it’s come down to is not a low level compared to the last 50 years of history.”
