WASHINGTON, March 8, 2019 (BSS/AFP) – American households saw their net
worth plummet at the end of 2018 amid a rout on Wall Street, the biggest
tumble since the global financial crisis, the Federal Reserve reported
Thursday.
The benchmark Dow Jones Industrial Average alone lost 13 percent from
October to December, draining the value of stock holdings including in
retirement accounts, amid concerns about the slowing US economy and the trade
war with China.
Household net worth fell $3.7 trillion to $104.3 trillion in the final
three months of the year, according to the Fed’s quarterly report. The 3.5
percent decline was the largest drop in percentage terms since the fourth
quarter of 2008.
The value of equities alone fell $4.6 trillion during the quarter but this
was partly offset by gains in the value of real estate and other assets, the
report said.
Stocks have recovered much of the fourth quarter losses, as Washington and
Beijing have signaled they are close to reaching a trade deal, and as Fed
policymakers said they intend to hold off on any further increases to
benchmark interest rates, reducing concerns that rate hikes would slow the
economy.
Declining stock prices in December ate into consumer confidence and
coincided with sharp drops in retail sales.
Economists say Wall Street selloffs can make consumers fearful for the
future and thus wary of spending.
Consumer spending in December fell 0.5 percent, its largest monthly
decline since September 2009, according to the Commerce Department.