The recent economic crisis left the median American family in 2010 with
no more wealth than in the early 1990s, erasing almost two decades of
accumulated prosperity, the Federal Reserve said Monday.
A hypothetical family richer than half the nation’s families and poorer
than the other half had a net worth of $77,300 in 2010, compared with
$126,400 in 2007, the Fed said. The crash of housing prices directly
accounted for three-quarters of the loss.
Families’ income also continued to decline, a trend that predated the
crisis but accelerated over the same period. Median family income fell
to $45,800 in 2010 from $49,600 in 2007. All figures were adjusted for
inflation.
The new data comes from the Fed’s much-anticipated release on Monday of
its Survey of Consumer Finances, a report issued every three years that
is one of the broadest and deepest sources of information about the
financial health of American families.
While the numbers are already 18 months old, the survey illuminates
problems that continue to slow the pace of the economic recovery. The
Fed found that middle-class families had sustained the largest
percentage losses in both wealth and income during the crisis, limiting
their ability and willingness to spend.
“It fills in details to a picture that we already knew was quite ugly,
and these details very much underscore that,” said Jared Bernstein, an
economist at the Center on Budget and Policy Priorities who served as an
adviser to Vice President Joseph R. Biden Jr. “It makes clear how
devastating this has been for the middle class.”
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