95 Fed. Res. Bull. A1 (2009)

handle is hein.journals/fedred95 and id is 1 raw text is: February 2009

Changes in U.S. Family Finances
from 2004 to 2007: Evidence from the
Survey of Consumer Finances

(Errata paragraph added on March 6,
Brian K. Bucks, Arthur B. Kennickell, Traci L. Mach,
and Kevin B. Moore, of the Board's Division of
Research and Statistics, prepared this article with
assistance from Gerhard Fries, Daniel J. Godzicki,
and Richard A. Windle.
The Federal Reserve Board's Survey of Consumer
Finances for 2007 provides insights into changes in
family income and net worth since the 2004 survey.'
The survey shows that, over the 2004-07 period, the
median value of real (inflation-adjusted) family in-
come before taxes was little changed; median income
had grown slightly in the preceding three-year period
(figure 1). Across most demographic groups, the
pattern of change was mixed, but a few changes stand
out: Income increased markedly for Hispanic or
nonwhite families, while it declined substantially for
families living in the Northeast or the Midwest and
for families headed by a person who was retired or
otherwise not working. In contrast to median income,
mean income in the recent period climbed 8.5 per-
cent, and the increases were spread broadly across
demographic groups. The increases were most strik-
ing for families in the top 10 percent of the distribu-
tion of net worth and for families headed by a single
parent, a person who was self-employed, or a person
who was aged 65 to 74. Over the preceding three
years, mean income had declined broadly. Differ-
ences in the rates of change in the median and mean
signal a change in the distribution of income.
Unlike family income over the 2004-07 period,
both median and mean net worth increased; the
median rose 17.7 percent, and the mean rose 13.0 per-
cent (figure 2). The increases were fairly broadly
spread, but with a number of noteworthy exceptions,
some of which entailed changes in medians and
1. For a detailed discussion of the 2001 and 2004 surveys as well as
references to earlier surveys, see Brian K. Bucks, Arthur B. Kennick-
ell, and Kevin B. Moore (2006), Recent Changes in U.S. Family
Finances: Evidence from the 2001 and 2004 Survey of Consumer
Finances, Federal Reserve Bulletin, vol 92, pp. Al A38,
www. federalreserve gov/pubs/bulletin/defaul It.lim.

2009; see p. A56)

L  Change in median arid n eaii incomes, 1998-1007 SCT

SOURCE: Federal Reserve Board, Survey of Consumer Finances.
means within demographic groups that differed sub-
stantially, either in terms of relative magnitude or in
the direction of change. Median and mean net worth
for the lowest 25 percent of the distribution of net
worth plunged 36.8 percent and 43.8 percent, respec-
tively: median net worth for the lowest 20 percent of
the distribution of income fell 1.2 percent, but the
mean rose 31.8 percent. Percentage increases in
2. Cha-ge  r, in d a  and mc  net worth  1998-2 7  Ct

SoRCE: Federal Reserve Board, Survey of Consumer Finances.

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