U.S. household net worth fell by $6.1 trillion in second quarter

Household wealth in the United States fell by a record $6.1 trillion in the second quarter to its lowest in a year as the bear market in the stock market has comfortable eclipsed any gains in real estate values, a Federal Reserve report on Friday stated.

“The value of stocks on the household balance sheet declined by $7.7 trillion, while the value of real estate increased by $1.5 trillion,” the Federal Reserve said in their report.

Household net worth plummeted to $143.8 trillion at the end of June from $149.9 trillion at the end of March, which is the second consecutive quarterly decline.

The net drop in wealth in the second quarter was approximately $30 billion larger than the previous record, which was hit 2 years ago as the Covid pandemic took hold and severely disrupted the financial markets, the retail sector and the rental market. The decline in the second quarter of 2020 remains as the largest on a percentage basis at 5.2% versus 4.1% in the most recent report.

The Federal Reserve will continue to closely monitor the markets before making any significant increase to interest rates.

“Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy,” Federal Reserve Chair Jerome Powell said in a speech delivered at the central bank’s annual symposium in Jackson Hole, Wyoming.

He added,“Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all. The burdens of high inflation fall heaviest on those who are least able to bear them.”

The Biden administration, however, has dismissed the idea that the country is in a recession. Treasury Secretary Janet Yellen praised the business climate under the stewardship of President Biden, referring to it as “one of the quickest economic recoveries in our modern history.”

“Our plan has worked,” she said. “The United States experienced the fastest pace of job creation in our history. Household balance sheets are strong. Businesses continue to invest. Our broad and inclusive recovery has outpaced that of many other large economies.”

However, the Biden administration has faced sharp criticism for ongoing inflation. One conservative think tank, Unleash Prosperity, found that the top 68 individuals in the Biden administration have spent an average of 2.4 years in the business world, with only one in eight members being able to prove “extensive business experience.”

The median length of business experience for Biden officials is zero year, which represents a large drop from the median of eight years among senior members of the Trump administration.

“Surely we want our political class to have a diversity of backgrounds. We want lawyers, grassroots activists, those with political and policy experience, scientists, health experts, and academics with required specialties,” the group argued. “But we also want people who have experience running large operations with hundreds and thousands of employees and who understand logistics.”




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Paul, 37, is from Scotland in the UK, but currently lives and works in Bangkok. Paul has worked in different industries such as telemarketing, retail, hospitality, farming, insurance, and teaching, where he works now. He teaches at an all-girls High School in Bangkok. “It’s a lot of work, but I love my job.” Paul has an active interest in politics. His reason for writing for FBA is to offer people the facts and allow them to make up their own minds. Whilst he believes opinion columns have their place, it is also important that people can have accurate news with no bias.

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