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post #1 of 27 (permalink) Old 02-23-2006, 06:37 PM Thread Starter
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Fed Survey says U.S. Family Income Declines

A wealth of statistics, anyway, including seldom-seen net-worth analyses

February 23, 2006
Survey Says Average U.S. Family Income Declines
By THE ASSOCIATED PRESS

WASHINGTON (AP) -- After the booming 1990s when incomes and stock prices were soaring, this decade has been less of a thrill ride for most American families.

Average incomes after adjusting for inflation actually fell from 2001 to 2004, and the growth in net worth was the weakest in a decade, the Federal Reserve reported Thursday.

Many families were struggling in the aftermath of the 2001 recession and the bursting of the stock market bubble in 2000, the Fed's latest ''Survey of Consumer Finances'' showed. The comprehensive look at household balance sheets comes every three years.

Average family incomes, after adjusting for inflation, fell to $70,700 in 2004, a drop of 2.3 percent when compared with 2001. That was the weakest showing since a decline of 11.3 percent from 1989 to 1992, a period that also covered a recession.

The average incomes had soared by 17.3 percent in the 1998-2001 period and 12.3 percent from 1995 to 1998 as the country enjoyed the longest economic expansion in history.

The median family income, the point where half the families made more and half made less, rose a tiny 1.6 percent to $43,200 in 2004 compared with 2001.

Economists said the weakness in the most recent period was understandable given the loss of 2.7 million jobs from early 2001 through August of 2003, when the country was struggling with sizable layoffs caused by the recession, the terrorist attacks and corporate accounting scandals.

The weak income and the stock market decline in the early part of the decade, which wiped out $7 trillion of paper wealth, had an adverse impact on family balance sheets.

Net worth, the difference between assets and liabilities such as loans, rose by 6.3 percent in the 2001-2004 period to an average of $448,200, after adjusting for inflation. That gain was far below the huge increases of 25.6 percent from 1995 to 1998 and 28.7 percent from 1998 to 2001, increases that were fueled by soaring stock prices.

The 2001-2004 performance was the worst since net worth actually declined by 9.9 percent in the 1989-1992 period.

The median family net worth, the point where half the families owned more and half owned less, stood at $93,100 in 2004, a rise of 1.5 percent after adjusting for inflation from 2001.

The report showed that the slowdown in the accumulation of net worth would have been even more sizable except for the fact that homeowners have enjoyed big gains in the value of their homes in recent years.

The gap between the very wealthy and other income groups widened during the period.

The top 10 percent of households saw their net worth rise by 6.1 percent to an average of $3.11 million while the bottom 25 percent suffered a decline from a net worth in which their assets equaled their liabilities in 2001 to owing $1,400 more than their total assets in 2004.

''This is the continuing story of the rich getting richer,'' said David Wyss, chief economist at Standard & Poor's in New York. ''Clearly, the gains in wealth are going to the top end.''

Democrats used the new report to blast President Bush's economic policies, contending it would be wrong to make permanent his tax cuts which primarily benefited the wealthy.

''These statistics show why, even though GDP is rising, most people do not feel better off,'' said Sen. Charles Schumer, D-N.Y.

The Fed survey found that the percentage of Americans who owned stocks, either directly or through a mutual fund, fell by 3.3 percentage points to 48.6 percent in 2004, down from 51.9 percent in 2001. Analysts said this was an indication that investors burned by plunging stock prices in the decade's early years have been leery about getting back into the market.

The share of Americans' financial assets invested in stocks dipped to 17.6 percent in 2004, down from 21.7 percent in 2001. But reflecting the housing boom, the share of assets made up by home ownership rose to 50.3 percent in 2004, compared with 46.9 percent in 2001.

The Fed survey found that debts as a percent of total assets rose to 15 percent in 2004, up from 12.1 percent in 2001.
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post #2 of 27 (permalink) Old 02-23-2006, 07:01 PM
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RE: Fed Survey says U.S. Family Income Declines

What are you Marsden?
Glass ball reader?
I live here and I see it every day.
[:(!]
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post #3 of 27 (permalink) Old 02-23-2006, 07:03 PM
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RE: Fed Survey says U.S. Family Income Declines

Damned Carter.....














[:D]

"If spending money you don't have is the height of stupidity, borrowing money to give it away is the height of insanity." -- anon
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post #4 of 27 (permalink) Old 02-23-2006, 07:09 PM Thread Starter
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RE: Fed Survey says U.S. Family Income Declines

Hahaha to both of you.

But Kajtek, I'm putting it out there because so many people say the economy's doing great, also because the article contains a number of facts that were new to me.

So there [:p]
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post #5 of 27 (permalink) Old 02-23-2006, 07:11 PM
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RE: Fed Survey says U.S. Family Income Declines

For folks like me who rely on on a strong dollar in terms of import value, the economy sucks. German parts prices keep going up and up and up......

"If spending money you don't have is the height of stupidity, borrowing money to give it away is the height of insanity." -- anon
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post #6 of 27 (permalink) Old 02-23-2006, 07:16 PM Thread Starter
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RE: Fed Survey says U.S. Family Income Declines

I'm lucky, I've been doing great personally but I definitely worry about how other people are doing. It seems like a lot of people are being left out. And, supposedly, we're all in this together...

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post #7 of 27 (permalink) Old 02-23-2006, 07:22 PM
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RE: Fed Survey says U.S. Family Income Declines

Quote:
GermanStar - 2/23/2006 9:11 PM

For folks like me who rely on on a strong dollar in terms of import value, the economy sucks. German parts prices keep going up and up and up......
This is good news for folks like me. When people are stressed (like, over their lack of income) they tend to get sick easier. Maybe I'll make that elusive bonus this year. Yeah, right.[xx(]

I'm not bitter or anything.



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post #8 of 27 (permalink) Old 02-23-2006, 07:23 PM
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RE: Fed Survey says U.S. Family Income Declines

Paper prices keep going up, up and up. When you set seasonal prices for your books and then print all your brochures for that price, then paper jumps 12%, this translates into a giant screwing for the publisher.

The following are reasons for paper price increases:

1. Paper companies have tightened the market by shutting down production and closing mills.
2. Foreign competition has the american plants saying 'Screw this!' They are simply refusing to make paper at such small margins. When the american supply gets tight, this creates demand for more foreign paper which is cheaper. However, as the demand on foreign paper increases, the price of foreign paper begins to equalize to that of american paper. This will only work until foreign suppliers are able to manufacture enough paper to fill the hole created by american mills, which is not the case as of now.
3. Fuel prices have caused shipping surcharges on paper plus the natural gas and electricity price increases have affected the ability to manufacture at previous levels.

It all boils down to fuel and electricity. The consumer is paying for high fuel costs many times over. Once when they fill their tank and again when they buy any product. High gas prices will definitely slow this economy down, but it's still not a bad economy.
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post #9 of 27 (permalink) Old 02-23-2006, 07:35 PM
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RE: Fed Survey says U.S. Family Income Declines

Quote:
Jillian80 - 2/23/2006 8:22 PM

Quote:
GermanStar - 2/23/2006 9:11 PM

For folks like me who rely on on a strong dollar in terms of import value, the economy sucks. German parts prices keep going up and up and up......
This is good news for folks like me. When people are stressed (like, over their lack of income) they tend to get sick easier. Maybe I'll make that elusive bonus this year. Yeah, right.[xx(]
Nah, stress is easily relived by certain medications. Oh yeah, you win again! [8D]

"If spending money you don't have is the height of stupidity, borrowing money to give it away is the height of insanity." -- anon
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post #10 of 27 (permalink) Old 02-23-2006, 07:38 PM Thread Starter
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RE: Fed Survey says U.S. Family Income Declines

LOL.... wow GS you're nearing your 5K!

Is there gonna be a party? [:p]
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