Net worth for households and non-profit groups decreased by $149 billion, a 1 percent drop at an annual pace, to $58.5 trillion, the Federal Reserve said today in its flow of funds report from Washington. It rose at a 7.4 percent rate in the previous three months. Housing wealth decreased for a fourth consecutive quarter from April to June.

A loss of $947 billion in real estate assets over the past year was compounded by a drop in the Standard & Poor’s 500 Index last quarter, the first decline in a year. The erosion in wealth, which remains below pre-recession levels, and a stagnant job market may prompt Americans to keep trimming debt and rebuild savings, limiting the spending that accounts for 70 percent of the economy.

“Households’ ability to spend is being constrained,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “Consumers are just tired to death of seeing the value of their homes fall.” The decline in wealth “provides the argument for long-term stagnation in consumer spending.”

Today’s report also showed American households cut debt for a 12th consecutive quarter.

Pre-Recession High

Since reaching a five-year low of $49.5 trillion in the first quarter of 2009, net worth has improved by $8.94 trillion. That still leaves it $7.4 trillion below the record high of $65.9 trillion reached in the quarter ended June 2007, six months before the recession began.

The value of real estate decreased by $98.6 billion in the second quarter after dropping by $219 billion in the previous three months.

Owners’ equity as a share of total real-estate holdings held at 38.6 percent last quarter, today’s report showed.

The value of financial assets, including stocks and pension fund holdings, held by American households decreased by $139 billion in the second quarter, according to the flow of funds data.

Household debt dropped at a 0.6 percent annual rate in last quarter. Mortgage borrowing decreased at a 2.4 percent pace. Other forms of consumer credit, including auto and student loans, increased at a 3.4 percent pace.

Cutting Debt

Americans are reducing debt and rebuilding savings to weather an unemployment rate that has averaged 9 percent this year. Payrolls were unchanged in August and the jobless rate held at 9.1 percent, the Labor Department said on Sept. 2.

Consumers already are restraining their spending. Retail sales were unchanged in August after rising 0.3 percent in July, according to Commerce Department data this week.

Today’s report also showed the balance sheets of businesses are faring better relative to households. Companies had a record $2.05 trillion in cash and other liquid assets at the end of the second quarter, up from $1.96 trillion in the prior three months. Profits at U.S. companies have topped analysts’ estimates for 10 straight quarters.

Total non-financial debt in last quarter rose at a 3 percent annual pace, led by an 8.6 percent increase by the federal government and a 4 percent gain among businesses. State and local government borrowing dropped at a 3.2 percent pace.