Americans lost half a trillion dollars in wealth in early 2022 | Job Binary

Net worth of households and non-profit organizations decreased by 0.5 trillion dollars According to Federal Reserve Bank data published on Thursday, $149.3 trillion in the first quarter. This is a significant reversal of the strong growth in wealth that began in mid-2020, driven by a boom in house and stock prices.

The decline in the first quarter mirrors the decline in the stock market earlier this year, that’s a $3 trillion cut from the value of corporate stocks held directly and indirectly. The total value of these holdings was $46.3 trillion in the first quarter, making it one of the largest household assets.
The Dow and S&P 500 are down about 5% each in the first three months, while the Nasdaq is down about 9%. It was the worst quarterly performance for markets since the first quarter of 2020, when the Covid-19 pandemic lifted the US economy.
This year, Russia’s invasion of Ukraine, rising oil prices, rising inflation, Federal Reserve raising interest rates and concerns about the Covid-19 pandemic.
But the decline in stocks was partially offset by a $1.7 trillion increase in real estate values ​​and a higher rate of personal savings, the Fed said. Real estate assets of households and non-profit organizations totaled $44.1 trillion.

The ratio of household net worth to disposable income remains near record highs and is well above pre-pandemic levels in 2019.

At the same time, household debt increased by 8.3% annually. That reflects strong growth in both home mortgages and consumer credit, the Fed said.

Continuation of housing prices led to growth of mortgage debt by 8.6%. Americans also took out more credit card debt and took out more auto loans, leading to an 8.7% increase in consumer credit.

Source link