Financial satisfaction of people in the U.S. rebounded strongly in the third quarter of the year, according to a new survey by the American Institute of CPAs, reversing the lows in the second quarter in the midst of the recession brought on by the novel coronavirus pandemic.
The AICPA’s Q3 2020 Personal Financial Satisfaction Index measured 33.1, representing a whopping 99 percent (16.5 point) increase from the previous quarter. That’s the biggest quarterly increase in the 27-year history of the PFSi, and a complete turnaround from the second quarter, when the index had its largest ever quarterly drop.
Oren Eini, chief executive officer and founder of Hibernating Rhinos, has more than 20 years of experience in the development world with a strong focus on the Microsoft and .NET ecosystem. Recognized as one of Microsoft's Most Valuable Professionals since 2007, Oren is also the author of "Inside RavenDB." He frequently speaks at industry conferences such as DevTeach, JAOO, QCon, Oredev, NDC, Yow! and Progressive.NET. An avid blogger, you can also find him under his pseudonym as Ayende Rahien at http://www.ayende.com/Blog/.
Gerard Brennan has more than 35 years of experience in the municipal bond industry in evaluations, brokering, trading, sales, underwriting and operations. He is the author of Chapter 27, “Municipal Bond Evaluations,” in The Handbook of Municipal Bonds by Frank Fabozzi. A former president and member of the board of governors of the Municipal Bond Club of New York, he launched and remains involved with its annual industry panel series. Brennan is a graduate of Iona College.
Heather Wilde is chief technology officer at ROCeteer, and a technology blogger with the ISACA.
The PFSi is built around various factors, including the labor market. The gains can be mainly attributed to improvements in job openings per capita and underemployment. Those had the biggest impact on increasing the overall PFSi. The biggest factor driving the quarter-over-quarter rally was a 35 percent (37 point) decrease in underemployment. A decrease in underemployment improves overall financial satisfaction in the index. While there was an improvement in underemployment in the third quarter from Q2’s record high, it’s still 117 percent above its level a year ago. For the second consecutive quarter, underemployment is still the biggest negative contributor to the average American’s personal financial satisfaction. The Q3 underemployment level reflects data measured through the middle of September.
“As Americans continue to navigate the economic impact of the COVID-19 pandemic, it is important to remember that the fundamentals of financial planning haven’t changed,” said AICPA PFS Credential Committee chair Dave Stolz in a statement Thursday. “Though the stock market’s record performance is encouraging, 2020 has served as a reminder of the volatile nature of markets. As the impact of COVID-19 continues to play out across the country, investors should weigh their risk tolerance and ensure they have ample cash on hand. Further, a tax-efficient financial plan that includes a diversified portfolio can give confidence that long-term financial goals will remain within reach through this period of extreme uncertainty.”
The coronavirus put millions out of work, prompting job openings per capita to show a record plummet earlier this year. In the third quarter, job openings started to recover, climbing 37 percent (20 points) compared to Q2. That factor is now only 10 percent below its measurement a year ago before the pandemic. The Q3 index comes from July data from the U.S. Bureau of Labor Statistics.
