Most families have struggled v. made great effort in spite of problems through the recession. Now, new data show just how deep the pain has been.
The Federal Reserve (Fed) says the recession wiped out (phrasal verb) took away nearly 20 years of Americans’ wealth.
From 2007 to 2010, Americans’ median net worth dropped by about 40 percent. The drop put median net worth back where it was in 1992.
The "median" is the point where half have more and half have less. Net worth is the value of things we own, minus debts such as house payments and credit cards.
The median net worth of American families was $126,400 in 2007. It was $77,300 in 2010.
Mark Zandi studies the economy. He said the drop was a serious one.
"We were in free fall n. fast drop without stop," he said.
The drop in housing values hurt minorities and the poor. The net worth of the richest families rose a little.
But the middle class was hurt the most. That is because many based their net worth on home ownership. Home values fell steeply adv. fast and strongly in the recession. Owners could not depend on that asset n. something valuable that is owned in bad times. Only about half of the middle class stayed at the same financial level.
The Fed also found:
• We made less money. Median income fell nearly 8 percent in 2010, to $45,800.
• Fewer of us owe money on credit cards. Those who do owe money owe less. The median balance dropped 16 percent. The percentage of families with no credit card debt rose.
• More families took out loans for education.
• More debt payments were late by 60 or more days. In 2007, 7.1 percent of payments were very late. In 2010, that figure rose to 10.8 percent.
The recession began in December 2007. It officially ended in June 2009. But the nation is healing very slowly. Experts say it will take a long time to recover.
The Fed said there are some good signs. A recent survey showed that family net worth has gone up a bit this year. And housing prices have been more stable adj. not likely to change. But the pain will last for a while.
"Recovery from the so-called Great Recession," said the Fed report, "has been particularly slow."
The Washington Post, with The Associated Press
That's a posting full of insghit!
the recession has got to me in 2011, so since then I dont have a place to work.but with this type of news I field more confident that I will get work this year.that is my hope.