The wealth of the median American family dramatically dropped from $126,400 in 2007, when the housing bubble burst, to $77,300 in 2010, when the economy officially got out of recession. That 40 percent drop in wealth, with figures adjusted for inflation, comes from a Federal Reserve report released yesterday. The Fed attributes the drop largely to the tumble in housing prices.
The report also found that median family income declined, though not as severely, from $49,600 in 2007 to $45,800 in 2010.
It's not clear if the report will push the Fed to issue monetary policies that deal with this huge decline in financial health. Liberal economists have criticized the Fed throughout the economic downturn for worrying too much about inflation and broader economic growth, and not enough about unemployment and how the recession affected families.