American households lost $1.33 trillion of their wealth in the first three months of the year as the recession took a bite out of stock portfolios and dragged down home prices.
The Federal Reserve reported Thursday that household net worth fell to $50.38 trillion in the January-March quarter, the lowest level since the third quarter of 2004. The first-quarter figure marked a decline of 2.6 percent, or $1.33 trillion, from the final quarter of 2008.
Net worth represents total assets such as homes and checking accounts minus debts such as mortgages.
The damage to wealth in the first quarter came from the sinking stock market. The value of Americans' stock holdings dropped 5.8 percent from the final quarter of 2008.
The value of stocks in the Dow Jones U.S. Total Stock Market Index, which measures nearly all U.S.-based companies, tumbled to $8 trillion when stocks hit a 12-year low on March 9. That was down from $19.2 trillion in October 2007.
The central bank's numbers don't reflect all the gains realized since stocks began rallying. On paper, the market is up $3.1 trillion from early March but still down $8.1 trillion from the peak.
Another hit to household net worth was falling house prices.
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