Monday, March 15, 2010

Middle Class Money Angst Still Apparent in Data

Fed's Flow of Funds numbers again show average Americans' net worth gaining more by mortgage defaults than asset appreciation.

If there is a recovery in Americans' finances, they don't see it.

The Federal Reserve reported Thursday that the net worth of U.S. "households" increased at about a 5% annual rate in the fourth quarter, a good deal slower than the blistering 20% pace over the two previous quarters, but still a solid increase.

Not long after the news was posted on the Wall Street Journal's Web site early that afternoon, the vituperative comments began to flow. Many simply dismissed the data as inaccurate or worse. The numbers simply didn't jibe with what they were seeing in their own finances or those around them.

Most of the gain in wealth has come from the rebound in the stock market, which drove a 15.4% annual rate of gain in households' equity holdings in the period. For the year, their equity holders increased 30.9%. (more)

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