Heading into Presidential Election, Americans’ Financial Satisfaction at Highest Level Since 2007

October 27, 2016

Contact: James Schiavone, 212-596-6119, jschiavone@aicpa.org

NEW YORK (October 27, 2016) – Less than two weeks before the presidential election Americans’ personal financial satisfaction has risen the highest level since the first quarter of 2007. On the strength of rising home equity and a decrease in loan delinquencies, Americans are feeling substantially more personal financial pleasure than pain, according to the 2016 third quarter PFSi (Personal Financial Satisfaction Index), released today by the American Institute of CPAs.

The PFSi, calculated as the Personal Financial Pleasure Index minus the Personal Financial Pain Index, represents the financial standing of a typical American. The third quarter index measured 19.0, a 1.7 point increase from the prior quarter and a 3.3 point increase from one year ago. Positive readings indicate that Americans are feeling more financial pleasure than pain.

The improvement from the prior quarter was due to an increase in the Personal Financial Pleasure Index of 1.0 point and a 0.6 point decrease in the Personal Financial Pain Index.  While the PFSi is at the highest level since the first quarter of 2007, it is still 23 percent below the all-time high set in the fourth quarter of 2006. 

The gain in the Personal Financial Pleasure Index over the previous quarter’s level was due to improvements in every component, led by a 2.0 point increase in the PFS 750 Market Index, followed by a 1.3 point increase in home equity, a 0.9 point increase in the CPA Economic Outlook and a 0.3 increase in job openings per capita.

“With the country facing the uncertainty of a Presidential election, the positive reading of the PFSi is a strong indicator that, despite political turmoil, the average American’s financial situation is pretty good these days,” said Kelley Long, CPA/PFS, member of the AICPA’s Consumer Financial Education Advocates group. “American's personal financial satisfaction has continued to improve steadily and, regardless of the outcome of the election, is trending in the right direction with room to grow in 2017.”

The PFS 750 Market Index, which been the biggest contributor to the Personal Financial Pleasure Index in recent years, enjoyed a ‘catch up’ quarter as many sectors rebounded from lackluster second quarter performances. Some of the biggest gains were seen in biotech and information technology companies, while utilities and consumer staples lagged behind.

Real home equity per capita grew due to increases in the market value of real estate, which have exceeded increases in outstanding mortgages. Portland, Ore.; Seattle; and Denver lead the way with the highest home price gains from a year ago.

The AICPA CPA Outlook Index, which captures the expectations of CPA executives in the year ahead for their companies and the U.S. economy, was 2.1 percent higher than the previous quarter, largely on the strength of increased optimism for profits.

On the employment side, job openings in the private sector increased in professional and business services, as well as durable goods manufacturing lead to a small gain in job openings per capita. Geographically, the cities with the strongest job growth recently have been those with growing populations, many of which have been bolstered by demands for services due to retirees relocating. 

“The PFSi shows that Americans’ financial satisfaction is back at pre-recession levels, which is great news. However, the slow climb to get there has been frustrating for people who are looking for work and may still be underwater with their mortgage,” said Michael Eisenberg, CPA/PFS, member of AICPA’s National CPA Financial Literacy Commission. “While there have been substantial improvements in the job market, many of the industries and regions hit the hardest are not back to their 2007 levels. This indicates we could see the index continue to rise if the economy gains momentum post-election, causing employers to hire more full-time workers.”

While financial pleasure is on the rise, financial pain continues to decrease. The Personal Financial Pain Index at 43.1 is 0.6 points lower than the previous quarter and 1.3 points lower than the year before. The decline from the preceding quarter level was the result of a 3.4 point decline in loan delinquencies, partially offset by a 0.6 point increase in taxes and a 0.2 point increase in inflation, while underemployment was flat.

While underemployment did not improve from the prior quarter, but 7.6 percent below the third quarter level in 2015. Despite the gains, it remains 20 percent behind the average value prior to the recession, indicating that there is still room for substantial improvement if more full-time jobs are created.

Inflation, the most volatile factor in the PFSi, continues to edge up from historic lows even though it remains below the Federal Reserve target of two percent. In fact, the decline of the pain index has slowed during the past five quarters, compared to the two years prior as a result of inflation’s slow rise.

Loan delinquencies were 6.3 percent lower than in the second quarter, showing the growing strength in the housing market as delinquencies on mortgages continue to decline. 

Personal taxes showed an increase from the previous quarter, although they declined from the year-ago level.   Dating back to 1994, the highest levels for personal taxes were 14% to 14.5% from late 1999 to mid-2000. Current personal tax levels are about 30% below that high water mark. 

Additional information on the PFSi can be found at: www.aicpa.org/PFSi.


The Personal Financial Satisfaction Index (PFSi) is the result of two component sub-indexes. It is calculated as the difference between the Personal Financial Pleasure Index and the Personal Financial Pain Index. These are comprised of four equally weighted factors, each of which measure the growth of assets and opportunities, in the case of the Pleasure Index, and the erosion of assets and opportunities, in the case of the Pain Index.