American households were collectively $2.2 trillion poorer at the end of September than they were at the end of June, marking the steepest-single quarter drop since 2008. Falling stock wealth was mainly to blame for the 4.1 percent drop to $57.4 trillion. Stagnant home prices didn’t much help things either.
According to CNN, the figure could rebound in the fourth quarter if stocks continue their comeback. Although the loss in collective net wealth in the third quarter was steep, it pales in comparison to the $5.6 trillion drop in the fourth quarter of 2008, which followed the financial crisis.
The recent plunge in net worth has a far greater effect on relatively wealthy households that can afford to invest, but the poor aren’t immune to the fallout. Companies with falling stock prices tend to cut jobs and freeze wages.