As the coronavirus pandemic forced equity prices down and contracted the U.S. economy, the net worth of U.S. households experienced a record drop in the first three months of 2020, according to The Wall Street Journal.
Dropping by 5.6 percent in the first quarter to a seasonally adjusted $110.79 trillion, household net worth saw the largest single-quarter decrease since the early 1950s. The Federal Reserve reported the news on Thursday in their report “Flow of Funds.” In addition to household net worth, GDP fell at an annualized rate of 5 percent from January to March.
The Fed reported that a majority of household net worth drops are a result of a $7.8 trillion fall in the value of directly and indirectly held corporate equities. At the same time, corporate debt (without financial companies) saw a record increase, growing 4.7 percent to $16.81 trillion.
The report detailed the federal government debt’s growth to $19.74 trillion in the first quarter, a 3.6 percent increase, but failed to reveal a majority of around $3.3 trillion in tax cuts and Congress spending in an effort to combat the coronavirus’s economic contractions.
$267 billion in stimulus has been received by 159 million households, as the Treasury Department started distributing stimulus packages in April. The added $600 a week in unemployment benefits program has spent an extra $91 billion.