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Yellen: Many American Families Are 'Extraordinarily Vulnerable'

Federal Reserve Chairman Janet Yellen speaks during a news conference at the Federal Reserve in Washington, Sept. 17, 2014.

The head of the U.S. central bank says a "large share" of American families are "extraordinarily vulnerable" because they lack the savings or other assets needed to weather financial problems.

U.S. Federal Reserve Chair Janet Yellen spoke Thursday in Washington, and said in many cases a sudden illness or other unexpected expense of $400 could cause serious problems.

She said research by Fed experts shows families in the lowest two-fifths of the income range have seen incomes and net worth fall since 2010. That is due in part to the lingering effects of the housing crisis that slashed the value of homes. In many cases, home values have not yet recovered even though the recession technically ended several years ago.

Yellen called the situation "sobering." Her remarks were made to a group that works to help low-income families save to buy homes or start small businesses.

Also Thursday, government economic experts reported disappointing news about the housing market, but showed the job market making some gains.

The Commerce Department said builders started construction on 14 percent fewer homes in August than the previous month. But the Labor Department said the number of Americans signing up for unemployment compensation dropped by 36,000 to a nationwide total of 280,000.