Americans $1.7 Trillion Poorer (Tami Luhby)

Americans' net worth falls for the second straight quarter as home and stock prices decline, but it may not hurt consumer spending, experts say.

NEW YORK (CNNMoney.com) -- Americans saw their net worth decline by $1.7 trillion in the first quarter - the biggest drop since 2002 - as declines in home values and the stock market ravaged their holdings.

{xtypo_quote_left} In the first four months of the year, employers cut 260,000 jobs, and on Friday the government is expected to report an additional 60,000 losses in May. Gross domestic product rose at a sluggish annual rate of 0.9% in the first three months of the year, when adjusted for inflation. {/xtypo_quote_left} 

Meanwhile, the amount of equity people have in their homes fell to 46.2%, the lowest level on record.

The net worth of U.S. households fell 3% to $56 trillion at the end of March, according to the Federal Reserve's flow of funds report, which was released Thursday.

The value of real estate assets owned by households and non-profits declined by $305 billion, while financial assets fell by $1.3 trillion, led mainly by a $556 billion drop in stocks and a $400 billion decline in mutual funds.

The first quarter's decline follows a $530 billion drop in wealth in the fourth quarter of 2007. Until then, net worth had been rising steadily since 2003, climbing nearly 31% over those five years. During the bear market of 2000 through 2002, household's net worth dropped 6.2%.

Read More: CNNMoney

Editor's Note: In the following text of the article, found at the link provided, there are some statements about consumer spending that just don't seem to have much basis in any normative reality, at first reading and upon reflection. If the gentle reader would be so kind as to leave a comment and explain just what the hell they are talking about, the editorial staff of World News Trust would be greatly appreciative. Thank you.