Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.
Total household wealth in the United States fell $6.1 trillion dollars in the second quarter of 2022, according to data released on Friday by the Federal Reserve.
The central bank's Financial Accounts of the United States report showed that wealth held by households and nonprofits dropped from $149.9 trillion at the end of March to $143.8 trillion at the end of June, representing a 4% decline.
Although the value of real estate increased $1.4 trillion, the value of directly and indirectly held corporate equities fell $7.7 trillion. Household debt, meanwhile, increased at an annualized rate of 7.4%. Indeed, the ratio between net worth and disposable income fell from 824% to 778%.
The United States recently met the rule-of-thumb definition of a recession - two consecutive quarters of negative growth - since the economy shrank at a 1.6% annualized rate in the first quarter and contracted at a 0.6% pace in the second quarter. Year-over-year inflation reached 8.5% in July 2022, according to data from the Bureau of Labor Statistics, with a slight moderation from the 9.1% reading in June 2022 driven by lower energy prices - even as costs for food, new vehicles, medical care, and shelter continue to rise.
In reaction to persistent inflationary pressures, the Federal Reserve has adopted a hawkish approach to raising interest rates - a policy that tends to restrict economic output as the cost of borrowing money increases. Monetary policymakers' current target is between 2.25% and 2.5%.
"Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy,"
Federal Reserve Chair Jerome Powell said in a speech delivered at the central bank's annual symposium in Jackson Hole, Wyoming. "Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all. The burdens of high inflation fall heaviest on those who are least able to bear them."
Officials in the Biden administration, however, have dismissed potential inflationary impacts arising from a series of recent federal stimulus packages. Treasury Secretary Janet Yellen praised the business climate under President Joe Biden as "one of the quickest economic recoveries in our modern history."
"Our plan has worked,"
she commented. "The United States experienced the fastest pace of job creation in our history. Household balance sheets are strong. Businesses continue to invest. Our broad and inclusive recovery has outpaced that of many other large economies."
An analysis from the Committee to Unleash Prosperity, a conservative think tank, found that the top 68 individuals in the Biden administration have spent an average of 2.4 years in the business world, with only one in eight boasting "extensive business experience."
The median length of business experience for Biden officials is zero years - a significant departure from the median of eight years among top members of the Trump administration.
"Surely we want our political class to have a diversity of backgrounds. We want lawyers, grassroots activists, those with political and policy experience, scientists, health experts, and academics with required specialties,"
the report argued. "But we also want people who have experience running large operations with hundreds and thousands of employees and who understand logistics."