Photo of bills and coins.
Overall, household wealth is declining. CC by Serge Melki/Flickr

Given the dismal state of the economy in some sectors, recent revelations of the recession being over seem to ring hollow. Though recessions are technically over when economic contractions stop, the depressed employment, household wealth and real estate contradict the idea that The Great Recession is over. The wealth of a household, or net worth, is defined as assets minus debts. For example, say a person owns a home, cars and things of that nature. The total values of those things, including investments, are the assets. Then you subtract liabilities. That includes debt, like credit cards and personal loans. Whatever is left over is the wealth of a household. However, recent economic data shows net worth for Americans is at a particularly low point.

Household wealth shrinks

The last few years have taken a toll on the economy, including household wealth. The summer has not been good to many people. Household wealth took a serious tumble. The Federal Reserve maintains the data on household wealth, and according to CNN, the Fed recently disclosed that total net worth has declined 2.8 percent over the second quarter of this year. That’s a small percentage, but the dollar amount is not. It amounts to $1.5 trillion of instant cash gone. The bulk of the shrinking dollar value was lost in the stock market. Mutual funds and retirement savings accounts were also negatively affected. Stocks on the open market were the hardest hit, as individual stocks lost $912 billion over the second quarter.

Real estate is a plucky sector

Employment is down, but real estate was where the hugest losses occurred. After a near nuclear winter, real estate is starting to slowly improve. Real estate values have increased by $46 billion. Granted, the gain is only 0.3 percent, but it’s a gain nonetheless. However, between 2007 and 2009, housing as an industry lost $17 trillion. Employment and real estate still need a lot of improvement. However, it seems the cash advanced from the government has done little at all.

Slow and steady wins the race

A lot of economic news seems bad. There is some good news though. All isn’t lost, by a long shot. According to USA Today, stocks are already rebounding and regaining value. A double dip recession is unlikely, as the economy is making its way slowly but surely.

Sources

CNN: http;//money.cnn.com/2010/09/17/news/economy/household_net_worth/index.htm

USA Today: http://www.usatoday.com/money/economy/2010-09-17-net-worth_N.htm

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