On Thursday, the US Federal Reserve said in a statement that the US Household wealth was slandered by nearly 5.6 per cent to $110.8 trillion over the first quarter of the year adding that a lion-share of the losses were stemmed from the hammering the US stocks had witnessed since breaching record closing highs on mid-February.
In point of fact, all three key indices of Wall St. had hit record closing highs between February 18th-19th, however, in the face of a rapidly spreading pandemic outbreak across the United States, major stock indices of the Wall St.
had entered into a correction course, while the US economy had entered into a technical recession, marking up an end to the longest expansion of the US economy on record which had been at its eleventh year. Besides, as the Fed said on its Thursday’s statement that the majority of the household losses were catalysed by the curbs in US stocks over Q1, 2020, between mid-February and end-March, an index that covers over 90 per cent of US stocks’ market caps, had shrugged off over $10 trillion in market valuation, while the benchmark S&P 500 had shredded off over 20 per cent after hitting a record high on February 19th, remarking the index’s largest loss on record since the peak of the Great Financial Depression between 2007-09.
However, S&P 500 had recovered all of its losses as of June 11th.
US Initial Jobless claims climb over 20 million in first quarter
Aside from that, in a vivid justification of Thursday’s Fed report on US household earnings’ slump, more than 20 million people across the United States had filed for unemployment benefits over the first quarter, while the figure had topped 40 million by early-June, shooting up the world’s No.
1 economy’s unemployment rate to a fifty-decade low of 14.7 per cent. Nonetheless, adding that the slump in household wealth would unlikely to create a major impression among common Americans since roughly 84 per cent of stocks owned by the US households, belong to the wealthiest 10 per cent American citizens, suggested Edward Wolff, an economics professor on New York University.