In March, the Federal Reserve chirped that Americans had, as a whole, recouped 91 percent of the aggregate wealth the Nation lost during the economic crisis of 2007-2009.
But Thursday, the Federal Reserve Bank of St. Louis released a report that strays pretty far from the Fed’s earlier, optimistic message. Unlike the March report, the current version adjusts for inflation, and averages all gains and losses across population demographics.
It’s a completely different picture. Instead of being on the cusp of full recovery, we’re not even halfway there. With the corrections in place, the average U.S. household appears to have recovered only 45 percent of whatever wealth was lost between 2007 and 2010.
For one thing, there are more 3.8 million more American households now than in 2007; for another, almost 70 percent of the post-recession gains have come in the form of stock surges, which benefit upper-income Americans in far greater proportion than those living in a middle-class household. And the value of homes, where most middle-class Americans’ wealth is stored, is still down almost 16 percent from pre-recession levels.