June 13 (Bloomberg) -- The White House, in a rebuttal to a Federal Reserve study, said the “entire decline” of almost 39 percent in household wealth reported by the central bank occurred before President Barack Obama took office and that much of the wealth has returned.
“The numbers are a tough and brutal snapshot of the financial crisis and housing bubble that President Obama inherited,” White House economists Gene Sperling and Jason Furman wrote in an official blog posted today. All of the decline in wealth occurred before Obama took office on Jan. 20, 2009, they said.
The June 11 report, released five months before presidential and congressional elections, showed almost every demographic group experienced losses during the 2007-2010 period of study. The losses may hurt retirement prospects for middle-income families, who are the focus of Obama’s re-election effort.
Presumptive Republican presidential nominee Mitt Romney has criticized Obama’s handling of the economy, including that the U.S. unemployment rate rose last month even as the Fed maintained record stimulus and after Obama’s $830 billion stimulus program.
The U.S. economy grew more slowly in the first quarter than previously estimated, expanding at a 1.9 percent annual rate, down from a 2.2 percent prior estimate. Retail sales in the U.S. fell in May for a second month, the Commerce Department reported today, another sign the U.S. economy is cooling.
The financial crisis wiped out 18 years of gains for the median U.S. household net worth, with a 38.8 percent plunge from 2007 to 2010 that was led by the collapse in home prices, the Federal Reserve study showed.
Sperling, director of the National Economic Council, and Furman, its principal deputy director, said in the White House blog that wealth “has risen every year” since Obama came to office, though it hasn’t fully recovered.
The economists said household wealth fell 24 percent between the third quarter of 2007 and the first quarter of 2009, when George W. Bush was president. They said Americans’ net worth grew by 15 percent between the first quarter of 2009 and the third quarter of 2010.
“Household wealth has risen every year President Obama has been in office, by a total of 23 percent overall,” Sperling and Furman wrote, citing gains the in value of mutual funds, increasing bank deposits and gains in stock values, aided by stabilizing home values.
Even so, they said, “These data show that wealth still has not fully recovered from the worst recession since the Great Depression and reinforces how much more work we have to do.”
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