Net worth rises, but unevenly

WASHINGTON - U.S. households' net worth rose in the first quarter of 2010, the fourth straight quarterly gain, the Federal Reserve reported Thursday.

But tumbling stock prices have reduced their wealth since then, and some economists say Americans' net worth may now drop slightly for the year. That helps explain why many say it will be 2012 or 2013, at best, before Americans' wealth returns to prerecession level.

Net worth - the value of assets such as homes, bank accounts, and investments, minus debts such as mortgages and credit cards - rose 2.1 percent last quarter, the Fed said. That put Americans' collective net worth at $54.6 trillion as of March 31.

In the midst of the 2007-09 recession, household net worth sank as low as $48.3 trillion. It has since risen 13 percent. Yet even counting last quarter's gain, net worth would have to rise 21 percent more to regain its prerecession peak of $65.9 trillion.

Household wealth is vital because consumers tend to spend according to how wealthy they feel, and their spending represents about 70 percent of the economy.

As Americans have gradually recovered some of their wealth, many of them - especially the affluent - have been spending more. But the housing and stock markets remain fragile. That is why most consumers are not spending as freely as they typically do in the early phases of recoveries.

Deena Bogan, 54, of Chicago, for example, has not found a full-time job since leaving her position as a hotel concierge in 2008. So she dips into her 401(k) retirement account and relies on credit cards.

"I'm still struggling as much as ever," Bogan said.