June 11th, 2009 | 
Author: According to the Federal Reserve’s Flow of Funds report today, net worth for households and non-profit groups decreased from $51.7 trillion in the fourth quarter to $50.4 trillion, which is the lowest level since 2004.
U.S. household wealth fell in the first quarter by $1.3 trillion, extending the biggest slump on record, as home and stock prices dropped.
Real-estate-related household assets decreased by $551.1 billion, which follows a $974.5 billion decrease in the fourth quarter, and mortgage borrowing was unchanged from January through March.
As wealth evaporated, Americans cut back on spending, and saved more, thereby blunting the effect of the tax breaks and income supplements provided by administration’s stimulus plan.
Retail sales did rise in May for the first time in three months, but the increase was solely due to people returning to automobile showrooms looking for bargains.
The economy contracted at a 5.7% annual rate in the first quarter, and consumer spending rose by 1.5%.
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