A “wealth shock” hits Americans … the largest economy in the world in a difficult challenge

The richest country in the world it seems in contraction after a boom period in which the collective net wealth of Americans has increased at a staggering rate over the past two years, even as households and businesses grapple with the scourge of COVID-19.

American households have amassed an additional $ 38.5 trillion from the beginning of 2020 to the end of last year, bringing their collective net wealth to a record of $ 142 trillion, according to Federal Reserve estimates.

However, as the United States tries to live with the virus and bring spending back to normal pre-pandemic, it now faces a new threat: the decline in collective wealth since early 2022, which JP Morgan estimates amounts to at least $ 5 trillion. dollars. , and could reach $ 9 trillion by the end of the year, according to Bloomberg.

So far, the biggest weight has been borne by the wealthiest Americans, as billionaires’ fortunes have fallen by nearly $ 800 billion since their peak, amid heavy losses in stocks, cryptocurrencies and other financial assets. High interest rates are also starting to destabilize the housing market, with families in the class media and workers who are saving most of their wealth.

To eliminate the highest inflation in decades, the Fed needs to get Americans to curb their spending, even if it takes an economic slowdown to get there.

Since the beginning of the year, the S&P 500 has fallen 18%, the Nasdaq 100 has fallen by 27%, and the Bloomberg Crypto has fallen by 48%.

All of this amounts to a “wealth shock” set to derail growth next year, they wrote in a note the economists of JPMorgan led by Michael Feroli.

Billionaires were the biggest winners in 2020 and 2021 and are now losing more than anyone else, with the Bloomberg Billionaires Index, a daily measure of the wealth of the world’s 500 richest people, in $ 1.6 trillion drop from peak in November.

Americans lead the index and have lost $ 797 billion since the peak. Perhaps the biggest loser was the richest person in the world, Elon Musk. He has lost $ 139.1 billion, or 41% of his fortune, since November, when his net worth briefly exceeded $ 340 billion. Amazon founder Jeff Bezos – the second richest person in the world – lost $ 82.7 billion, or 39% of his maximum wealth.

And while losses in wealth among the richest Americans, which make up just 0.001%, reduce inequality, they aren’t an outlet for most of those concerned about rising inequality in the United States.

Read More About: Business News

Follow AsumeTech on

More From Category

More Stories Today

Leave a Reply