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.
Donna Stephens is a managing director at Deloitte Tax LLP. She joined Deloitte in November 2020 as managing director with over 26 years of experience serving clients across various industries. Prior to joining Deloitte, she was senior director of operations and chief of staff for tax, FP&A and global functions finance for a Fortune 500 technology company. She specializes in global tax compliance and has designed and built several global centers of excellence.
At Active Digital, David drives and oversees the company's go-to-market motions, client partnership and success motions, solution and delivery capabilities, and thought-leadership efforts. He also ensures corporate operations and talent alignment with the needs and pace of Active's growth and delivery orgs. Beyond his internal business leadership, David loves to invest time in strategic client relationships and projects.
Tom is a Principal in the Health practice and leads the voluntary benefits team at Buck, an integrated HR, pensions, and employee benefits consulting firm. For more than 20 years he has helped some of the country's largest and most respected employers design voluntary benefit programs that deliver on business objectives and drive greater employee engagement.
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.
