WASHINGTON – American households have rebuilt less than half of the wealth lost during the recession, leaving them without the spending power to fuel a robust economic recovery, according to a new analysis from the Federal Reserve.
From the peak of the boom to the bottom of the bust, households saw a total of $16 trillion in wealth disappear amid sinking stock prices and the rubble of the real estate market. Since then, Americans have only been able to recapture 45 percent of that amount on average, after adjusting for inflation and population growth, according to the report from the St. Louis Fed, released Thursday.
In addition, the report showed most of the improvement was due to gains in the stock market, which primarily benefit wealthy families.
Also Thursday, the Commerce Department said that economic growth in the first quarter came to a modest 2.4 percent annual rate, only marginally below the 2.5 percent annual rate the government had estimated last month. That was still much faster than the 0.4 percent growth during the October-December quarter.