WASHINGTON (AP) — Americans' long journey to regain the wealth they lost in the recession is stalled.
Households failed even to run in place during the April-June quarter as sinking stock prices eroded wealth. Stocks have since recovered about two-thirds of those losses. But based on last quarter's data, household net worth would have to surge 23% to reach its pre-recession peak.
Net worth — the value of assets like homes and investments, minus debts like mortgages and credit cards — fell 2.7% last quarter, or $1.5 trillion, the Federal Reserve said Friday. It now stands at $53.5 trillion.
That's above the bottom hit during the recession, $48.8 trillion in the first quarter of 2009. But it's far below the pre-recession peak in wealth of $65.8 trillion.
The drop from April to June was the first quarterly decline in Americans' wealth since early 2009. Before then, net worth had risen slowly for four straight quarters.
Economists generally think household wealth has ticked up in the July-to-September quarter so far, because of higher stock prices. Yet given last quarter's setback and expectations of scant gains ahead, some economists have pushed back their forecast for when Americans will regain all their lost wealth: Not until the middle of this decade.
Their stagnant wealth will likely keep Americans from spending freely — and the struggling economy from picking up strength. Consumers tend to spend according to how wealthy they feel. And their spending accounts for about 70% of the economy. In the meantime, people are saving more and paring debt, Friday's data showed.