Daily News: June 12, 2012

Fed Says U.S. Wealth Fell 38.8% in 2007-2010

Bloomberg reported, according to a Federal Reserve study, that the financial crisis wiped out 18 years of gains for the median U.S. household net worth, with a 38.8% plunge from 2007 to 2010 that was led by the collapse in home prices.

Bloomberg said median net worth declined to $77,300 in 2010, the lowest since 1992, from $126,400 in 2007. Mean net worth fell 14.7% to a nine-year low of $498,800 from $584,600. Bloomberg notes that almost every demographic group experienced losses, which may hurt retirement prospects for middle-income families, Fed economists said in the report.

Commenting on the report, Bloomberg quotes Lance Roberts, CEO of Streettalk Advisors, as saying, “The impact has been a massive destruction of wealth all across the board.” Roberts added, “What you see is an economy that’s really very, very stressed for the bottom 60 to 70% of the population that’s struggling just to make ends meet.”

To read the full Bloomberg article, click here.