US household wealth drops 18 percent in 2008
Recession has hit every US household in 2008…
The net worth of US households fell by nearly 18 percent or 11.2 trillion dollars in 2008 as the world’s biggest economy grappled with a prolonged recession, the Federal Reserve said Thursday.
Household net worth — the difference between the value of assets and liabilities — was an estimated 51.47 trillion dollars at the end of the fourth quarter of 2008, down 5.1 trillion dollars from the 
preceding quarter, the US central bank said.
For 2008 as a whole, household net worth fell 11.2 trillion dollars from 62.68 trillion dollars in the previous year, according to the Fed’s latest “Flow of Funds Accounts” quarterly report.
The 2008 figure is the lowest since 2004, when household wealth was at 51.87 trillion dollars, the report said.
The United States is facing its worst recession since the Great Depression after a home mortgage meltdown triggered financial turmoil that slammed the brakes on growth.
The recession began in December 2007 and based on the most recent government estimate, US gross domestic product contracted at an eye-popping 6.2 percent annual pace in the fourth quarter of 2008.
Some analysts say the downturn may be even worse in the first quarter of 2009.
The Fed also said that at the end of 2008, the level of outstanding domestic nonfinancial debt was 33.5 trillion dollars, including household debt valued at 13.8 trillion dollars and total government debt of 8.6 trillion dollars.
Household debt contracted at an annual rate of two percent in the fourth quarter of 2008, following two quarters of very weak growth, the report said.
Source: MSNBC
