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.
Craig Granowitz, MD, is Senior Vice President and Chief Medical Officer at Amarin Corp.
Jeff Goldberg has spent his career as an IT executive, analyst, and entrepreneur in the insurance industry. He has led IT organizations at Marsh & McLennan and NIP Group and worked as an advisor to hundreds of insurers while at Datos Insights and Celent. Currently, he runs an insurer CIO Study Group and serves as an independent advisor to technology providers such as Socotra.
Josh Rowland is the chief executive officer and vice chairman of Lead Bank, a Missouri-chartered commercial bank with locations in the Crossroads Kansas City, Lee’s Summit and Garden City, Missouri. Josh serves in multiple management roles at the bank, including membership in the bank’s executive committee, loan committee, and oversight of the bank’s marketing and technology functions. Josh also serves as the executive director of Lead Business Advisors, a division of Lead Bank that advises companies on strategic planning, reorganizations and financing. He is also the president and CEO of Lead Financial Group, the holding company, which owns 100% of the bank.
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.
