Household wealth in the U.S. fell 2.8 percent in the second quarter as share prices were depressed by the European debt crisis, marking a setback for Americans’ efforts to repair finances battered by the recession. Net worth for households and non-profit groups declined by $1.5 trillion to $53.5 trillion, according to the Federal Reserve’s Flow of Funds report issued today in Washington. Home values rose because of a tax credit that has since expired. The Standard & Poor’s 500 Index dropped 12 percent during the three months ended June 30, erasing gains from the previous quarter.
While stock indexes have climbed this quarter, renewed signs of weakness in housing and unemployment near a 26-year high may prompt Americans to increase their savings, holding back the economic recovery. Read more here:
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