ST. LOUIS • The average U.S. household has a long way to go to recover the wealth it lost to the recession, a report by the Federal Reserve Bank of St. Louis concluded Thursday.
The typical household has regained less than half its wealth, the analysis says. A separate Federal Reserve report in March calculated that Americans as a whole had regained 91 percent of their losses.
Household wealth plunged $16 trillion from the third quarter of 2007 through the first quarter of 2009. By the final three months of 2012, American households as a group had regained $14.7 trillion.
Yet once those figures are adjusted for inflation and population growth, the average household has recovered only 45 percent of its wealth, the St. Louis Fed concluded.
That suggests that consumer spending could remain modest as many Americans try to rebuild their wealth by saving more and paying off debts.
The analysis, by economists Ray Boshara and William Emmons of the regional bank’s Center for Household Financial Stability, noted that the rebound in wealth hasn’t been equally distributed. As a result, many households are even further behind than the average.
The poorest households have felt the sharpest losses as a consequence of the recession, said James Bullard, president of the St. Louis Fed, citing the study.
“While many Americans lost wealth during the Great Recession, younger, less-educated and nonwhite families lost the greatest percentage of their wealth,” Bullard said in a statement. “Household deleveraging, or paying down debt, has played a key role in the recent recession and the slow recovery.”
The most-vulnerable households held a disproportionate amount of their wealth in housing and shouldered higher levels of debt before the downturn, Bullard said.
Individuals with weaker balance sheets are less likely to attend college and are less financially stable and economically mobile, according to the study. The harm done to household wealth may be hampering consumer spending and limiting the expansion.
Nearly two-thirds of the increase in household wealth since 2009 is due to rising stock prices, the authors note. Stock indexes reached record highs this month. Those gains disproportionately benefit affluent households: About 80 percent of stocks are held by the wealthiest 10 percent of the population.
For middle- and lower-income households, home values represent the biggest chunk of total wealth. And home prices remain about 30 percent below their peak, even after jumping nearly 11 percent in the past year.
“It’s like the economy is this airplane and not all the engines are firing,” Emmons said.