Total household net worth in the fourth quarter of 2018 dropped by the largest amount since the fourth quarter of 2008 when the country was amid a steep recession, according to data released Thursday by the Federal Reserve.


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                        Total household net worth is a measure of the assets — such as homes, stocks and bank accounts — owned by American families and nonprofits minus their debts. In the fourth quarter of 2018, it fell by about $3.7 trillion, a 3.5 percent quarterly decline. Going back to 1952, the start of the Fed’s data, only three quarters — the third and fourth quarters of 2008, and the second quarter of 1962 — posted bigger declines in household net worth, percentage-wise.

                        The data shows that change was driven by the poor performance of the stock market in the fourth quarter of last year. The flailing market erased $4.6 trillion in assets from household and nonprofit balance sheets, which was offset somewhat by gains in real estate and other assets.?

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                        The typical American household, however, may not feel much of a financial pinch as a result of the drop. For starters, stocks have since recovered much of their late 2018 losses, although they remain below the record highs set earlier in the year.?

                        More important, most of the household wealth in the United States is owned by the country’s richest families. In 2016, for instance, the top 1 percent of families owned 40 percent of all household wealth, with the next 9 percent of families holding an additional 39 percent. That leaves 21 percent of the country’s net worth for the remaining 90 percent of American families.

                        Furthermore, about half of American families don’t own any stocks, while the top 10 percent of families control about 84 percent of the stock market.

                        Taken together, the numbers are a reminder that the stock market is not the economy, and that big national-level data sets may not necessarily reflect financial reality for typical American families, many of whom live paycheck to paycheck and struggle to meet even small unexpected expenses.

                        Correction: An earlier version of this story misstated the percent of the nation’s wealth held by families in the 2nd through 10th percentiles: it is 39 percent, not 29 percent.

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