Why Do You Feel Poor? Because You Are

From Clusterstock: Retail sales were surprisingly good in April and May, but we believe this was primarily the result of the tax rebate checks–which will soon be spent. Meanwhile, consumers are likely to feel ever more strapped. Northern Trust’s Paul Kasriel shows why:

First, the wealth effect. Americans are a lot poorer than they were a year ago. Specifically, thanks to declines in home equity wealth, they’re almost $2 trillion poorer than they were a quarter ago, with $399 billion of that decline coming from the fall in real-estate equity…

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Photograph by Claire Nowak-Boyd.

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