U.S. household net worth fell 4 percent to $57.4 trillion, the sharpest drop in over two years, and Americans’ stock portfolios fell 5.2 percent in the third quarter. About 50 percent of Americans own stocks or stock mutual funds. (“Wealth in U.S. takes big hit,” Atlanta Journal Constitution).
The European debt crisis and consumer deleveraging depressed the Standard & Poor’s 500 Stock Index by 14 percent and home values decreased by $98.3 billion in the third quarter after dropping by $37 billion in the previous three months. U.S. mortgage debt, which funded consumer spending during the real estate boom, is entering its fourth year of decline as foreclosures declining home sales continue.
Meanwhile, Americans continue to batten down the hatches, spending less, reducing debt and rebuilding savings in the face of a 8.6 percent unemployment rate, even as payrolls climbed by 120,000 in November.
At the same time, corporations are sitting on $2.1 trillion in cash, keeping job growth modest at best.
Page Perry is an Atlanta-based law firm with over 170 years collective experience protecting investor rights and fighting Wall Street greed.