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.
Karen Buck is executive vice president and chief administrative officer of EagleBank. Her most recent roles include executive vice president — director of operations/contact center at Flagstar Bank in Michigan and executive vice president — commercial, retail/payment operations at TD Bank. Ms. Buck earned a Bachelor of Science with a concentration in finance and Spanish from La Salle University in Philadelphia. She has been recognized by South Jersey Biz Magazine as one of the 25 Women to Watch, NJBIZ Journal as one of the Best 50 Women in Business, the American Banker Most Powerful Women Team Award and Crain's Detroit 100 Most Influential Women.
Atty Bruggemann, Esq. is a partner at Dimopoulos Bruggemann P.C., a matrimonial and family law firm based in Westchester County, New York that specializes in high-net-worth divorces.
Brian O'Connell is an analyst at insuranceQuotes.com, which publishes in-depth studies, data and analysis related to auto, home, health, life and business insurance. In his role as analyst, Brian studies the insurance industry in order to provide trusted tips, advice and insights. A former Wall Street trader, he is the author of the books "CNBC's Creating Wealth" and "The Career Survival Guide." His commentary appears regularly on major media platforms like Fox Business, U.S. News, The Motley Fool, TheStreet.com and many others.
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.
