Stock Market Losses Erases $9 Trillion From Americans Wealth

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Falling stock markets have wiped out more than $9 trillion in wealth from U.S. households, putting more pressure on family balance sheets and spending.

According to the Federal Reserve, Americans’ investments in corporate equities and mutual fund shares decreased from $42 trillion at the beginning of 2020 to $33 trillion by the end of the second quarter. If the market trend continues, many American could lose a large portion of their wealth. According to experts, total losses between $9.5 trillion and $10 trillion are not unlikely.

According to economists, the recent market plunge could have negative effects on the economy at large. For example, Mark Zandi of Moody's Analytics stated that GDP growth could slow by 0.2 percent in the next year if current trends continue.

“The loss of stock wealth suffered to date, if sustained, will be a small, but meaningful headwind to consumer spending and economic growth in coming months,” Zandi.