Showing posts with label 2012. Show all posts
Showing posts with label 2012. Show all posts
Thursday, March 6, 2014
Household Net Worth Recovered 1 17 Billion in 4Q 2012
Household net worth continued its recovery in the fourth quarter, gaining $1.17 billion. Household net worth has been revering steadily since the beginning of 2009 and is now approaching its pre-crisis peak. The fourth quarter’s household net worth is just $1.3 billion short of its 3Q 2007 peak of $64.4 billion. Household net worth rose 9% over 2012.
The improvement was driven primarily by a near $800 billion increase in the value of financial assets that occurred despite stock market declines. The Dow Jones Industrial Average fell 2.5% over the quarter. The increase in the value of financial assets shows households’ increasing willingness to invest, as household holdings of equities surged. The Dow has now surged 9.1% so far in 2013, indicating that improvement in household net worth will likely improve.
Home equity also improved as the housing recovery continued, with net worth receiving a $500 billion increase due to real estate wealth. Home equity as a percentage of household real estate rose to 46.6%, its highest level since the first quarter of 2008.
Liabilities also rose for the household sector as families become willing to take on more debt. Total liabilities rose by about $133 billion, as household debt grew at an annual rate of 2.4% in the fourth quarter.
Read the Federal Reserves Z.1 release.
ReadThe RestEntry..
The improvement was driven primarily by a near $800 billion increase in the value of financial assets that occurred despite stock market declines. The Dow Jones Industrial Average fell 2.5% over the quarter. The increase in the value of financial assets shows households’ increasing willingness to invest, as household holdings of equities surged. The Dow has now surged 9.1% so far in 2013, indicating that improvement in household net worth will likely improve.
Home equity also improved as the housing recovery continued, with net worth receiving a $500 billion increase due to real estate wealth. Home equity as a percentage of household real estate rose to 46.6%, its highest level since the first quarter of 2008.
Liabilities also rose for the household sector as families become willing to take on more debt. Total liabilities rose by about $133 billion, as household debt grew at an annual rate of 2.4% in the fourth quarter.
Read the Federal Reserves Z.1 release.
Thursday, November 14, 2013
Consumer Delinquencies Decline Significantly in Fourth Quarter 2012
Consumer delinquencies declined significantly in last year’s fourth quarter, with bank card delinquencies falling to levels not seen since the third quarter of 1994, according to results from the ABAs Consumer Credit Delinquency Bulletin.
The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, fell 17 basis points to 1.99 percent of all accounts in the fourth quarter, below the 15-year average of 2.39 percent. The ABA report defines a delinquency as a late payment that is 30 days or more overdue.
James Chessen, ABA’s chief economist, attributed the improvement to consumers’ continued efforts build a financial buffer against economic uncertainty.
“Consumers continue to carefully manage their finances in an effort to get debt levels under control and build up a secure financial base,” Chessen said. “While this conservative approach to credit may slow economic growth in the short-term, it portends stronger, more consistent growth in the future. The sharp decline in delinquencies reinforces the notion that the economic recovery has become more self-sustaining and is on a path to increased growth.”
While Chessen found the continued decline encouraging, he cautioned that future challenges could make it difficult for some consumers to meet their financial obligations.
“Make no mistake about it, a great deal of uncertainty still lingers over this economy,” Chessen said. “Furloughs from sequestration, falling disposable income and increased healthcare and regulatory costs for businesses could lead to challenges in the year ahead.”
Read ABAs full release.
ReadThe RestEntry..
The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, fell 17 basis points to 1.99 percent of all accounts in the fourth quarter, below the 15-year average of 2.39 percent. The ABA report defines a delinquency as a late payment that is 30 days or more overdue.
James Chessen, ABA’s chief economist, attributed the improvement to consumers’ continued efforts build a financial buffer against economic uncertainty.
“Consumers continue to carefully manage their finances in an effort to get debt levels under control and build up a secure financial base,” Chessen said. “While this conservative approach to credit may slow economic growth in the short-term, it portends stronger, more consistent growth in the future. The sharp decline in delinquencies reinforces the notion that the economic recovery has become more self-sustaining and is on a path to increased growth.”
While Chessen found the continued decline encouraging, he cautioned that future challenges could make it difficult for some consumers to meet their financial obligations.
“Make no mistake about it, a great deal of uncertainty still lingers over this economy,” Chessen said. “Furloughs from sequestration, falling disposable income and increased healthcare and regulatory costs for businesses could lead to challenges in the year ahead.”
Read ABAs full release.
Subscribe to:
Posts (Atom)