Effect of inflation? US household wealth suffers a record drop

The fallout of a high inflation-laden economy is being borne by US households. Reportedly, a federal reserve report released on Friday showed that the US household wealth tumbled by more than $6.1 trillion in Q2 to its lowest level in more than a year.

The report stated that the household net income slid to $143.8 trillion at the end of June from $149.9 trillion, recorded in March, earlier this year. On a whole, the collective wealth of Americans had taken a beating of more than $6.2 trillion from the $150 trillion figure set at the end of 2021.

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The drop was historic as it breached the previous record by more than $30 billion, recorded two years earlier when the COVID-19 pandemic wreaked havoc in the market during its initial days.

While the US household income is taking a beating, household expenditures are touching new highs. Reportedly, theaverage cost of raising a child has grown to over $300,000 in the USA, primarily due to sky-high inflation rates.

According to a Bloomberg report, the average amount required to raise a child of a middle-income married couple, born in 2015, till he/she is 17 yearsold or in high school will be $310,605; which comes down to roughly $18,271 per year.

Read more:Want to raise a kid in the US? Be prepared to shell over $300,000

What has happened to the US economy?

As reported by WION, the US has been facing its worst bout of economic slowdown in recent times. The economy has contracted for two successive quarters which suggests that a recession has set in place.

The inflation rate for the month of July stood at 8.5 per cent, majorly due to a drop in fuel prices. However, if compared to year-on-year numbers, the inflation rate was still touching a 40-year record high and consumers were bearing the brunt of it. In June, the figure stood at 9.1 per cent.

Moreover, a recent Bloomberg survey stated that there was a 40 per cent chance that the country will slip into a recession by next year.

Read More:President Biden claims US had ‘zero per cent inflation’ in July; gets trolled by Republicans

(With inputs from agencies)

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