Money Americans hold as part of corporate equities, and mutual fund shares fell at the end of 2022’s second quarter, from $42T to $33T.
That means Americans collectively lost $9T in wealth as the stock market has continued its dogged downward dive this year.
This measurement was taken in July, and since then, major market indexes have continued to fall, so the total amount of wealth wiped from existence could be closer to $9.5T or $10T. The most significant effects have been felt among the wealthy, who owned a large portion of the now-non-existence wealth, but it may not remain that way for long.
With a massive shift, it could cause a ripple effect throughout other areas of the market, lead to Americans feeling the crunch at home among their budgets, and reduce GDP growth by 0.2%.
The chief economist of Moody’s Analytics, Mark Zandi, explained to CNBC, “The loss of stock wealth suffered to date, if sustained, will be a small, but meaningful headwind to consumer spending and economic growth in coming months.”
It remains to be seen whether or not this will affect consumer spending in the future. Those first affected by it (the wealthy) show no signs of changing their spending habits so far – and it may remain the same down through the income levels as the ripples extend outward.