The Federal Reserve on Monday released a report on the economy and as expected the middle class in America is getting hosed. According to the report the average American family’s wealth has fallen to early 1990s levels, eliminating a 20 year period of incredibly increasing wealth.
The Fed report found that the median family’s net worth fell from $126,400 in 2007 to just $77,300 in 2010. Net worth is considered a key factor for the economy’s stability and growth potential.
The disparity in net worth is largely a result of home equity declines which declines from $110,000 in 2007 to just $75,000 in 2010.
The study also found that the number of family’s actually putting money in their savings accounts fell from 56.4% in 2010 to just 52% through 2011.
When American’s are saving money the report has found that they are using those savings not for retirement or education but for short-term needs as they arise.
While households reporting debt fell by 2.1% the report found that the media amount owed was still very high with 74.9% of households holding some sort of debt.
One form of debt does seem to be decreasing, the report found that family’s who hold no credit cards at all rose from 27% to 32%.
With the student loan industry on the brink of $1 trillion in student loan debt the study also found that the number of family’s carrying student loan debt increased from 15.2% in 2007 to 19.2% in 2010.
In the meantime the top 10 percent of households still earn at least $349,000, only a slight decline from previous numbers. Essentially the wealthy are still rich, just not quite as rich on average as they were a few years ago.