The Great Recession Put Us in a Hole. Are We Out Yet?

Photographer: Joe Raedle/Getty Images

In October 2007, U.S. stocks were hitting an all-time high, jobs were plentiful and homes were expensive. Two months later, the Great Recession began to eviscerate the economy, ultimately sucking $10 trillion out of U.S. stocks, collapsing a housing bubble and pushing the unemployment rate to 10 percent. A lot of talk of financial irresponsibility -- people living beyond their means -- followed.

Seven years later, most Americans have put their finances in order, reducing all kinds of consumer debt. So it's no small insult, after the injury of the recession, that many aren't being rewarded for smarter spending. Americans are making a lot less money and own fewer assets, the Federal Reserve said last month, even as stocks reach new highs.

Housing prices recovered, though they're still 13 percent below 2007 levels. Fewer Americans own houses they can't afford -- sending rents up 16 percent, to an average of $1,100 per apartment in metro areas.

On the bright side, housing's collapse taught consumers about the dangers of debt. Americans have shed $1.5 trillion in mortgage debt and $139.4 billion in credit card and other revolving debt over the last six years. They were pushed by tighter credit rules and enticed by the chance to refinance at lower rates. But they also saved more diligently. The U.S. savings rate has doubled since 2007, to 5.4 percent in September.

Educational loans are up, by $2,500 for the median family paying off student loans. But that's prompted by tuition increases and a surge of people going back to school. Post-secondary enrollment jumped 15 percent, or 2.8 million, from 2007 to 2010, according to the U.S. Department of Education.

Jobs may be coming back, but good jobs are still scarce. More than 7 million people are working part-time jobs when they'd prefer a full-time gig, 57 percent more than in 2007. And more than 3 percent of adults have left the workforce entirely since 2007, according to the U.S. labor force participation rate.

The labor market’s way behind the stock market, which fully recovered all its losses early last year.

That’s swelled retirement accounts. And falling fees mean that investors keep more of what their money earns. But, thanks to employer cutbacks, fewer workers have access to pensions or retirement plans on the job.

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