The average U.S. household still has a long way to go to recover the wealth it lost to the Great Recession, according to a report by the Federal Reserve Bank of St. Louis concluded Thursday.
According to the report, the typical household has recouped less than half its wealth, the analysis found. A separate Federal Reserve report in March calculated that Americans as a whole had regained 91 percent of their losses. The findings were released as part of the St. Louis Fed's 2012 annual report.
"Clearly, the 91% recovery of wealth losses portrayed by the aggregate nominal measure paints a different picture than the 45% recovery of wealth losses indicated by the average inflation-adjusted household measure," the report said. "Considering the uneven recovery of wealth across households, a conclusion that the financial damage of the crisis and recession largely has been repaired is not justified," the researchers said.
The number of U.S. households grew 3.8 million to 115 million from the third quarter of 2007 through the final three months of last year, according to the report. As a result, the rebound in wealth has been spread across more people and reduced the average wealth for each household.
In addition, though inflation has averaged just 2 percent over the past five years, it's eroded some of the purchasing power of Americans' regained wealth.
Much of that wealth has since been recovered but not as much as some think, say the authors of the report, Ray Boshara and William Emmons.
"While household balance sheets have improved in the past few years - families are rebuilding their savings and paying down their debts - balance sheets have not yet fully rebounded," they write.
