Household wealth takes step backwards

By Chris Isidore, senior writer


NEW YORK (CNNMoney.com) -- Household net worth fell sharply in the second quarter, ending a string of four straight quarters of gains, according to a Federal Reserve report Friday.

The report shows a $1.5 trillion loss in combined household net worth in the period, to $53.5 trillion. That represented a 2.8% drop in total wealth owned by American consumers after all their debt is considered.

Most of the loss came from a $912 billion decline in the value of individual stocks, a $650 billion drop in the value of retirement savings and a $295 billion drop in mutual funds. The Standard & Poor's 500 index slid about 12% during the quarter. But the index has rebounded about 9% since the end of the quarter.

"Despite this setback, we expect net worth to rebound further in the future as the recovery in the labor market continues," said Theresa Chen, an economist with Barclays Capital, in a note to clients Friday.

Real estate bucked the trend by growing by $46 billion, but that was only a 0.3% improvement. Of almost as great a help to household balance sheets was a cutback in debt. Mortgage loans held by consumers declined $49.3 billion, while outstanding consumer loans fell by $15.4 billion.

Household net worth had regained about $6.2 trillion in value during the previous four quarters, although that was still well short of the $17 trillion loss from the middle of 2007 through the start of 2009. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play

Search for Jobs

Index Last Change % Change
Dow 17,928.20 -142.20 -0.79%
Nasdaq 4,939.33 -77.60 -1.55%
S&P 500 2,089.46 -25.03 -1.18%
Treasuries 2.20 0.03 1.24%
Data as of 9:28am ET
Company Price Change % Change
Regions Financial Co... 9.91 -0.07 -0.70%
KeyCorp 14.65 0.02 0.14%
Comcast Corp 57.98 -0.80 -1.36%
Twenty-First Century... 33.92 -0.55 -1.60%
CSX Corp 35.41 -1.20 -3.28%
Data as of May 5
Sponsors

Sections

Chanel has the highest brand awareness among luxury Chinese consumers, according to a new survey. More

Jobs at Disney, the NCAA and UPS, as well as warehouse, babysitting and journalism jobs are some of the most searched on Google in 2015. More

The London-based startup is on a quest to democratize access to technology and coding with its computer company. More

Lack of wage growth and career opportunities along with long hours are most likely to make someone say "Sayonara, boss," according to a new global survey of full-time employees. More