Slowly, Americans are regaining their lost wealth

http://www.forbes.com/feeds/ap/2010/03/11/personal-finance-us-net-worth_7429532.html


Economic terms
1. portfolios-the securities held by an investor
2. net worth-the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards
3. mortgage-a conveyance of or lien against property (as for securing a loan) that becomes void upon payment or performance according to stipulated terms



Explanation

Americans are gradually regaining their wealth. Household net worth rose last quarter because the economy boosted their stock portfolios. According to the Federal Reserve, Americans' net worth rose 1.3 percent in the fourth quarter to $54.2 trillion. However, economists say that consumers need a much stronger and longer wealth increase if they are going to spend more money. In the second quarter of 2009, net worth had risen by 4.5 percent. In the third quarter, net worth had risen 5.5 percent. Before the recession, Americans' net worth was $65.9 trillion. In order to regain the $65.9 trillion, Americans' net worth would have to increase by 21 percent. During the October to December 2009 period, growth in stock portfolios gave the biggest rise to net worth. When the recession began in December 2007, Americans' net worth was $48.5 trillion. This caused Americans to be hesitant to spend. In 2009, consumer spending dropped 0.6 percent. According to the National Association for Business Economics, "the economy and financial conditions slowly recover, consumer spending is projected to grow around a modest 2.2 percent."


Prediction

It's hard for me to predict whether the economy will have any robust improvements, especially since the stock market and jobs are unpredictable. If the stock market and jobs become more stable, then people would spend distinctive amounts of money and buy more assets that could increase the overall American net worth. If more jobs are lost and the value of stocks decline, then Americans will spend less and their net worth will not increase.