Fed Economic Report: Middle Class Getting Hosed

American families lose two decades of accumulated wealth
By Neal Colgrass,  Newser Staff
Posted Jun 11, 2012 3:00 PM CDT
Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill in Washington, before the Joint Economic Committee hearing on the health of nation's economy, the slumping recovery, and the European...   (AP Photo/J. Scott Applewhite, File)

(Newser) – The Fed released its much-anticipated report on the economy today, and the news is not pretty. In short, the median American family's wealth has fallen to early-1990s levels, eliminating two decades of prosperity, while savings are down and debt hovers like a vulture over most Americans, the New York Times reports. To no one's surprise, middle-class families are taking the brunt of it. One key number: The median family's net worth has fallen from $126,400 in 2007 to $77,300 in 2010.

A few highlights from the report, which compares the economy 18 months ago to that of 2007:

  • The percentage of families saving money from the year before dropped from 56.4% to 52%.
  • The motive for saving money has changed, from long-term goals like retirement or education to wanting money for short-term needs.
  • Households reporting debt actually fell by 2.1%, but the median amount owed held steady, and 74.9% of households remain in debt.
  • Families are carrying fewer credit cards; the percentage holding none at all rose from 27% to 32%.
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