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Americans lost half a trillion dollars in wealth in early 2022

By Tami Luhby, CNN

Americans’ wealth took a nosedive early this year as the stock market plummeted.

The net worth of households and nonprofit organizations dropped $0.5 trillion to $149.3 trillion in the first quarter, according to Federal Reserve Bank data released Thursday. That’s a notable turnaround from the robust gains in wealth that began in mid-2020, fueled by skyrocketing prices of homes and equities.

The first-quarter decline reflects the swoon in the stock market this year, which slashed $3 trillion from the value of directly and indirectly held corporate equities. The Dow and the S&P 500 each dropped nearly 5% in the first three months, while the Nasdaq plummeted nearly 9%. It was the worst quarterly performance for the markets since the first quarter of 2020 when the Covid-19 pandemic upended the US economy.

Weighing on the market this year have been Russia’s invasion of Ukraine, surging oil prices, soaring inflation, interest rate hikes by the Federal Reserve and continued concern about the Covid-19 pandemic.

But the decline in equities was partially offset by a $1.7 trillion increase in the value of real estate and a continued high rate of personal saving, the Fed said.

Meanwhile, household debt grew at an annual pace of 8.3%, reflecting strong growth in both home mortgages and consumer credit.

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Article Topic Follows: CNN - Business/Consumer

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