Average U.S. family’s wealth plunged 40% in recession, Fed says

(From the latimes.com) The typical American family lost nearly 40% of its wealth from 2007 to 2010 as the Great Recession reduced household net worth to a level not seen since the early 1990s. The net worth of the median U.S. family — one with an equal number of families richer and poorer — fell to $77,300 in 2010 from $126,400 three years earlier, after adjusting for inflation, the Federal Reserve said in a new report Monday.

The drop, much steeper than previous Fed quarterly reports have suggested, underscores the severity of the 2007-09 recession that decimated the housing market and resulted in massive layoffs that slashed people’s incomes.

Although families have recovered some of the lost wealth in the last 18 months, the new 80-page Fed report shows that the financial shock hit them across the board — rich and poor, young and old, the well-educated and the less educated and those with and without children. The report also detailed incomes, debts and various assets owned by families.

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