Net Worth of U.S. Households Declines for First Time Since 2002, Fed Says

[Purveyor]

March 6 (Bloomberg) -- U.S. household wealth fell in the fourth quarter for the first time in five years and borrowing slowed as home values plunged and lenders restricted credit, Federal Reserve figures show.

Net worth for households decreased by $532.9 billion from the previous three months, the first decline since the third quarter of 2002, according to the Fed's quarterly Flow of Funds report today. Housing-related net worth dropped by $176.4 billion.

Lower home and stock prices and reduced access to loans are prompting Americans to spend less and are driving up foreclosures. A slowdown in consumer spending, which accounts for two-thirds of the economy, threatens to push the U.S. into a recession.

``Consumers are being squeezed from several directions,'' Fed Governor Frederick Mishkin said in a speech this week. Reduced household wealth, combined with a weakening job market and near-record fuel prices ``are likely to restrain spending growth in the period ahead.''

Owners' equity as a share of their total real-estate holdings fell to 47.9 percent, the lowest since quarterly records began in 1951, from 48.9 percent in the prior period.

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http://www.bloomberg.com/apps/news?pid=20601103&sid=aG0OJGDWpFH4&refer=news

[HockeyMom]

1. With our new millionaire "middle class"

that throws the majority of us in with the ranks of the POOR.

[The_Casual_Observer]

2. Can you imagine how bad it must be that, after cooking the numbers

in a million different ways, that they still came out with this answer?