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The sun may have set over
Wall Street at the end of 2018, hurting the value of
Household net worth.Household net
worth fell in the fourth quarter for the
first time in more than
three years after the brief stock-market nosedive to close the year.
The Federal Reserve on Thursday
reported in its financial accounts of the United States that the net
worth of households and nonprofits
fell by $3.73 trillion, or 3.5%, to $104.33 trillion in the fourth quarter. Thatâ??s the
first fall since the 1% decline in the third quarter of 2015, the Fed said.
The decline in
Household net
worth was entirely due to the stock market, where roughly $4.6 trillion of value was wiped away.
Related: The stock market just booked its ugliest Christmas Eve plunge ever
The good news is that the stock-market drop has basically been entirely recovered. The S&P 500
SPX, -0.58%
آ* on Thursday morning was within 0.4% of its level at the close of November.
Itâ??s also
worth pointing out that the Fed report is focused on the aggregate level of
Household wealth, and not the experience of the typical Americans. Only 14% of Americans directly hold stocks,
according to a separate report from the Fed, while just over half had retirement accounts like IRAs or 401(k) plans. Americans are far more likely to own a vehicle, and about two-thirds own a home.
Related: Homeownership rate reaches four-year high in the fourth quarter as millennial demand recovers
Meanwhile, the report on financial accounts released Thursday also showed that businesses continued to pile on debt, with nonfinancial businesses borrowing up 3.8% in the fourth quarter, about the same pace itâ??s grown for each of the last five quarters.
Household debt growth slowed a bit to 2.9% from 3.6%.
The federal governmentâ??s debt grew by 2.5%, the smallest growth rate in five quarters but one that is projected to kick back up again
after tax cuts and spending increases.
State and local government borrowing shrunk by 2.2%, the fourth consecutive decline.
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