It seems that the total household wealth in the United States has rising $2 trillion in the second quarter of 2009. This marks an important point for many Americans since it would restore both finances and consequent spending capabilities for most consumers.
The net worth for household and non-profit groups went from $51.1 to $51.3 trillion in the previous three months. According to the Federal Reserve’s Flow of Funds report, it was actually the first gain in seven quarters. Overall wealth figures were still $11.1 trillion below the peak amount that was reached before the recession began in 2007.
Any increases in wealth will translate into more materials to help Americans rebuild their finances faster—it will also facilitate economic recovery and growth as consumers start spending more again. A number of economists have made projections about the trajectory, noting that spending numbers may take years to recover fully.
Taken with the federal government’s various stimulus measures such as tax credits, extended jobless benefits, and the cash-for-clunkers program, consumer spending for the current quarter should see growth.
The drop in average net worth for U.S. consumers, which finally ended during the last quarter, had stared in the last quarter of 2007. It ended up begin the longest period of decreases since officials started keeping records back in 1952. Wealth dropped by a record $13 trillion during that time.
Factors like growing unemployment, tight credit, lower stock prices and plunging home values all restricted spending. Consumers took on less debt so they could concentrate on fixing their individual balance sheets. This led to higher saving rates, upwards of 6% of disposable income in May, the highest levels since 1998. Such savings trends were supported by an increase income levels connected to various fiscal stimulus initiatives.
Tags: household wealth, consumer wealth
Related Articles
- Managing Household Credit Card Debt As part of a concerted effort to maintain the levels of credit card debt, many consumers have been trying to pay off their bills and slow down on unnecessary spending
- Overdraft Fees Can Become A Major Household Expense When you are preparing a household budget, chances are you don’t include a line for bank overdraft fees. Overdraft fees are never planned and certainly incurred by “accident”.
- UK Households Using Credit Cards To Pay Utility Bills A new study shows residents of the United Kingdom are using their credit cards to pay their utility bills at higher rates. Financial information company Markit published figures regarding the
- Factors That Are Affecting Consumer Spending It is not a secret that consumer spending in the United States is down by significant margins. Consumer spending, designated personal consumption expenditures by the government, dropped at an annualized rate
- Many Americans Getting Second Jobs To Cover Holiday Expenses Christmas may be a few months away, but many companies are hiring holiday help now. And to avoid the financial drain of the season a new CouponCabin.com survey found that