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To print article, click Print on your browser's File menu. Go back Posted 3/6/2006 |
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Extra Fed survey finds family incomes shrinking Comprehensive survey finds debt levels rising, fewer people owning stocks and net worth rising more slowly. By The Associated Press The average income of American families, after adjusting for inflation, declined 2.3% in 2004 compared with 2001, while their net worth rose at a slower pace. The Federal Reserve reported that the drop in inflation-adjusted incomes left the average family income at $70,700 in 2004. The median, or point where half the families earned more and half less, did rise slightly in 2004 after adjusting for inflation to $43,200, up 1.6% from the 2001 level. The median, or midpoint, for net worth rose 1.5% to $93,100 from 2001 to 2004. That growth was far below the 10.3% gain in median net worth from 1998 to 2001, a period when the stock market reached record highs before starting to decline in early 2000. Fewer of us own stocks The Fed's results were published in late February in the 2004 Survey of Consumer Finances, a document that provides a comprehensive view of how Americans are faring on such pocketbook issues as incomes and net worth. It's released every three years. The Fed survey found the share of Americans' financial assets invested in stocks fell to 17.6% in 2004, from 21.7% in 2001. The percentage of Americans who owned stocks, either directly or through a mutual fund, fell 3.3 percentage points to 48.6% in 2004, down from 51.9% in 2001. Stock ownership rates were highest in 2004 among families with higher incomes and families age 55 to 64. Overall median stock holdings fell to $24,300 in 2004, from $36,700 in 2001. Fewer 401(k) investors, but saving more With the first baby boomers turning 60 this year and nearing retirement, the survey found the percentage of families with some type of tax-deferred retirement account, such as a 401(k), fell 2.5 percentage points to 49.7% of all families. However, those who had retirement accounts saw their holdings increase. The median for holdings in retirement accounts rose 13.9% to $35,200. Net worth is the difference between a family's assets and its liabilities. The Fed survey found that debt as a percent of total assets rose to 15% in 2004, from 12.1% in 2001. Mortgages to finance home purchases were by far the biggest share of total debt at 75.2% in 2004, unchanged from 2001. |
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