(Bloomberg) — Americans’ wealth declined in the third quarter by the most in four years, reflecting a slump in stock prices that have since recovered.
Net worth for households and non-profit groups decreased by $1.23 trillion from July through September, or 1.4 percent, from the previous three months to $85.2 trillion, the Federal Reserve said Thursday in its financial accounts report, previously known as the flow of funds report.
Equity values plunged in the third quarter as concerns mounted about the global economy, overshadowing the positive effect from higher home prices on Americans’ net worth. As the value of their assets declined, households slowed the pace of borrowing, the report also showed.
Household debt rose at a 1.5 percent annualized rate in the third quarter, the slowest pace in almost two years. Growth in consumer credit, including auto and student loans, climbed at a 7.2 percent pace from 8.5 percent in the second quarter, while mortgage borrowing cooled to a 1.6 percent rate from 2.4 percent.