This week, the Federal Reserve released its Survey of Consumer Finances showing the depth of the recession’s impact on family finances. The numbers are a tough and brutal snapshot of the financial crisis and housing bubble that President Obama inherited. Based on other, more frequent data, the entire decline in household wealth took place before President Obama came into office and it has risen every year since he came into office. Nevertheless, these data show that wealth still has not fully recovered from the worst recession since the Great Depression and reinforces how much more work we have to do.
The Federal Reserve conducts the Survey of Consumer Finances every three years so the latest numbers compare family finances in 2007 and 2010. Although the Survey of Consumer Finance is a useful gauge of household finances, it does not record exactly when the changes took place nor does it provide the most timely data. To look more deeply into these questions, this blog post uses another Federal Reserve survey—the Flow of Funds—which has the advantage of providing quarterly numbers and covering the period up through the first quarter of 2012. These data show:
- The entire drop in household wealth between 2007 and 2010, the period covered by the Survey of Consumer Finances, occurred in 2008—before the President took office. Household wealth fell 24 percent between 2007-Q3 (which is roughly the quarter covered by the Survey of Consumer Finances which is conducted over the second half of the year) and 2009-Q1. Household net worth grew by 15 percent between 2009-Q1 and 2010-Q3, following the extraordinary range of actions in economic recovery, housing, the financial sector, and the auto industry. This increase, however, was still not enough to make up for the declines in 2008—which is most likely why the Survey of Consumer Finances recorded a decline for the full 2007 to 2010 period.
- Household wealth has risen every year President Obama has been in office—by a total of 23 percent overall. In addition to the increases that occurred during 2009 and the first part of 2010, household net worth has increased another 6 percent since 2010-Q3 (roughly when the 2010 Survey of Consumer Finances was conducted), for a total increase of 23 percent since President Obama took office.
Fonte: White House