The Federal Reserve report on consumer finances, which is conducted every three years and is backward looking, shows just how brutal the Great Recession was on American households. This will show how bad some of the unemployment situation took a toll on the nation’s families as a whole, while the value of housing and many other assets were taken far lower.
Median family income fell by 7.7% between 2007 and 2010 and the average income fell by 11.1%. The median family net worth fell by a whopping 38.8% between 2007 and 2010, while the average fell by 14.7%. Do not be confused over how to interpret the data as this drop in the net worth is the worst since the calculation has been tallied up.
The only good news on the surface is that consumer deleveraging (whether forced or not) continued. Some 74.9% of families have debt but only 39.4% of families had credit card debt by the end of 2010. Median credit cards balances fell by 16.1% between 2007 and 2010.
During the 2007 to 2010 period, median household equity fell to $75,000 from $110,000, but debt as a percentage of assets rose to $16.4% from 14.8%.
Much of the data was skipped over here for an obvious reason: this was old data from 2007 to 2010. Still, it shows just how much of a toll the recession took on the nation and many Americans had not yet recovered by the end of 2010 when the report data ended.
JON C. OGG