Household net worth decreased in the second quarter, according to the Federal Reserve’s Flow of Funds report. Net worth now stands at $58.4 trillion, down slightly from 58.6 trillion in the first quarter. This fall is the first following four straight quarters of growth and leaves us well short of the 2Q 2007 high of 65.6 trillion.
As was expected, the recent poor performance in the stock market following the downgrade in U.S. debt compounded by the ongoing sovereign debt crisis have had a negative impact on household net worth. This follows a period in the first quarter where the stock market was recovering and contributing to net worth growth.
This report is very little changed from the last report and is in line with a number of other indicators that show our economy failing to grow, but also not yet contracting.
See the release.