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.
Rick Agajanian is vice president of product management for WorkWave.
Tai Christensen is the Director of Government Affairs and the Chief Diversity, Equity & Inclusion Officer at CBC Mortgage Agency
Alex Amezquita is CFO of Herbalife Nutrition, where he is responsible for corporate financial functions at the highest level, including the company’s financial reporting, accounting, tax and treasury functions. Prior to joining Herbalife Nutrition in 2017 as the senior vice president of finance, strategy and investor relations, Amezquita was senior vice president at Moelis and Company, a leading global investment bank, where he advised Fortune 500 companies on mergers and acquisitions, corporate governance, capital markets strategy and investor relations. Beginning in 2012, Amezquita worked extensively as a financial advisor to Herbalife Nutrition on key strategic and financial initiatives while at Moelis. Amezquita brings over 20 years of experience to Herbalife Nutrition from his finance and engineering background. He commenced his investment banking career on Wall Street advising Fortune 100 companies while at Merrill Lynch and Centerview Partners. He began his professional career in the aerospace & defense and technology sectors. During this time, Amezquita worked as both a lead design engineer and consultant to a broad spectrum of industry leaders ranging from Northrop Grumman to Cisco Systems. Amezquita holds an MBA in finance from the Wharton School at the University of Pennsylvania, and a Master and Bachelor of Science degree in electrical and computer engineering from Carnegie Mellon University.
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.
