2009 Household Net Worth Increased by $2.8 T
WALL STREET JOURNAL -- "Americans got richer for a third straight quarter at the end of 2009, a favorable trend for an economic recovery that could use some more fuel. A quarterly Federal Reserve report Thursday said U.S. households' total net worth climbed 1.3% in the fourth quarter, to $54.18 trillion from the third quarter's $53.49 trillion. For 2009 as a whole, net worth rose 5.4%. Household net worth is assets, such as home equity, minus liabilities, such as mortgage debt.
A large chunk of the increase in net worth came from a drop in household debt, as an increasing number of financially stretched consumers defaulted on mortgage and credit-card debts. While the defaults are painful for families and costly to banks and investors, economists say they are also speeding the financial rehabilitation necessary for a return to robust growth. "It puts us closer to the point where the consumer can start making a stronger contribution to recovery," said Joseph Carson, director of global economic research at AllianceBernstein in New York."
MP: The $2.8 trillion increase in household net worth represents an increase per household of almost $25,000, and brings average net worth per household to $477,277.