(RepublicanDaily.org) – President Joe Biden insists his economic plan is working and inflation is coming down — but ordinary Americans looking at their financial situations are going to find that hard to believe. New figures from the Federal Reserve show this year has been a catastrophe, with personal finances taking one of the worst beatings in history.
US household net worth fell for a third-straight quarter, a Fed report showed, as the value of equity holdings dropped https://t.co/p2t0DWukfM
— Bloomberg Wealth (@wealth) December 9, 2022
On December 9, the Federal Reserve released its latest quarterly financial accounts, and they make for grim reading. The Fed collects so much data that it can be confusing, but after accounting for the falling stock market, inflation, and rising house prices, the final figures show American households have suffered an 8.6% decline in real wealth — a shocking $13.5 trillion. That’s the second-largest decline in history after the 2008-2009 financial crash.
On paper, household wealth is higher than it was in the last quarter of 2019. However, that has to be balanced with a significant increase in personal debt. For the last ten years, this number has stayed flat after adjusting for inflation, but in the third quarter of this year, it suddenly surged by 4.3%. That’s due to inflation; Americans are using their savings, borrowing more money, and using more credit to prop up their lifestyles as prices rise faster than incomes.
What’s worrying economists is the uncertainty about savings. Do families have enough of a reserve to see them through if inflation surges again? Will house values keep falling, reducing the value of assets as debt continues to rise? Finally, can Biden actually get us out of this mess?
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