Republicans seized on the data to claim that the current administration is out of touch. President Obama helped the GOP with his comments that the private sector is doing fine and that small businesses will not be affected by his health care plan.
Democrats correctly pointed out that most of the collapse occurred on George W. Bush's watch, not Obama's. They also noted that things have gotten a bit better between 2010 and 2012.
Clearly, there is data in the report to help both sides. But while a 40 percent decline in household net worth may have been stunning news in Washington, D.C., it wasn't news to most Americans. They have experienced the decline day after day for the last five years.
As 2007 began, 38 percent of Americans thought the U.S. economy was in good or excellent shape. That fell to 8 percent in 2009 before inching up to 11 percent at the beginning of this year and 15 percent last month.
The Fed report noted that the housing market was largely to blame for the declining net worth. Again, that was no surprise to anyone outside of Washington. In 2008, 80 percent of homeowners believed their home was worth more than they paid for it. Just 49 percent have such optimism today. And more believe the value of their home will decline rather than increase over the coming year.
Perhaps the most dramatic changes have occurred on the jobs front. As 2007 began, 29 percent of workers reported that their firms were hiring. Just 13 percent reported layoffs. Two years later, during Obama's first month in office, the numbers were just about reversed. Only 14 percent reported hiring, and 30 percent said their employers were reducing staff. Today, the numbers are essentially even, with equal numbers reporting growing and shrinking payrolls.
Collectively, the data shows that Americans perceive the economy as a bit better than it was in 2010 but not nearly as strong as it was in 2007, and there are doubts as to whether the housing market is any stronger. The Rasmussen Consumer Index shows that consumer confidence fell from a high of 118.8 in January 2007 to half that level in early 2009. It is now back to the high 80s.
Team Obama would like to frame the debate around the fact that confidence has rebounded and is up by more than 20 points since the current president took office. Republicans would like to focus on the fact that confidence is still down more than 30 points over the past five years.
For most voters, the political arguments, campaign tactics and reports from the Federal Reserve will be largely irrelevant on Election Day. What matters most is the reality they experience on a daily basis. That brings us back to the question Ronald Reagan made famous three decades ago: "Are you better off today than you were four years ago?"
That's the kind of hope and change Americans were looking for when they elected Obama. At the moment, they don't think the president has delivered. Consumers rate their personal finances the same as they did on the day he was inaugurated. If that doesn't improve by November, there's likely to be a new president in January.