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Saving and wealth building are vital for U.S. families and the U.S. economy. It is well-known that the U.S. personal savings rate is low and that many U.S. families have very modest financial assets. Table 1 shows the long term decline in the personal savings rate, from eight percent of disposable income in the early 1980s, to five percent in the late 1980s and early 1990s, to less than zero in mid-1999. For 1998 as a whole, the personal savings rate was 0.5 percent, the lowest annual level since the depression of the 1930s. During the first half of 1999, the personal savings rate was negative, -0.9 percent.
The personal savings rate, as measured by the Department of Commerce, does not include increases in wealth resulting from increases in stock prices or increases in housing prices. However, there is controversy concerning whether and how much such increases should be treated as savings. Furthermore, increases in stocks and housing prices have not been distributed equally over the population. What counts is the level of assets families hold. On an individual family level, survey data show that the typical U.S. family holds very low levels of financial assets and has low total wealth. In 1995 more than half of all U.S. families had net financial assets of $1,000 or less.
This study describes the levels and distribution of real and financial assets of U.S. families, and it probes factors associated with household asset holdings, focusing on debt. The report presents the results of analysis of data on the real and financial wealth of U.S. persons and families in 1995.
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