Recent economic numbers from the U.S. Census Bureau reveal how Americans have been dealing with the downturn over the past few years — and the numbers aren't good.
They show that between 2005 and 2010, American households lost 35 per cent of their average net worth. U.S. household median net worth fell to $66,740 in 2010 from $102,844 in 2005. That suggests one-third of net worth has been wiped out and it points to two things: the decline U.S. real estate values and changes in the stock market.
The figures show that the U.S. economic downturn is not just real, it has had a massive impact on the bottom line of Americans, says Nik Nanos of Nanos Research.
And it makes concerns in Canada about a housing bubble in cities such as Vancouver and Toronto all the more real, as seen with Finance Minister Jim Flaherty's move last month to tighten mortgage lending rules in Canada.
"The real estate market [here] has been fairly stable, it has been actually the one outlier that's been driving confidence in the Canadian economy, but it shows how fragile things are and how quickly things can change," Nanos told Evan Solomon, host of CBC News Network's Power & Politics. "What we see is the minister of finance trying to get ahead of this in order to calm down or cool the real estate market so we don't hit any kind of turbulence."
High household debt is also a concern, because if interest rates rise it could leave Canadians unable to keep their heads above water.
For U.S. President Barack Obama, the economy poses real risks for this fall's presidential election; for a Conservative government in Canada that probably wants to run on the economy in 2015, it will be doing its best to make sure things are in better shape come election time.
Recognized as one of Canada's top research experts, Nik Nanos provides numbers-driven counsel to senior executives and major organizations. He leads the analyst team at Nanos, is a Fellow of the Marketing Research and Intelligence Association and a Research Associate Professor with SUNY (Buffalo).