The Pulse

Americans' Financial Satisfaction Hits 24-Year High

The ‘pleasure index’ signals recovery may be complete

New research from the American Institute of CPAs (AICPA). Visit

October 30, 2017 — NEW YORK–(BUSINESS WIRE)–Increased gains in the stock market and a high number of available jobs has Americans experiencing their highest level of personal financial satisfaction in the 24-year history of the AICPA’s Personal Financial Satisfaction Index (PFSi).

The new high reached by the Q3 2017 PFSi, released today, eclipses the previous record reached right before the great recession (Q4 2006). The AICPA began issuing the PFSi quarterly in January 2015, with the data for the index tracking back to 1994.

The PFSi is calculated as the Personal Financial Pleasure Index minus the Personal Financial Pain Index, with positive readings signaling that Americans are feeling more financial pleasure than pain. The Q3 PFSi measured 25.9, a 2.6-point increase from the prior quarter. The increase was due to a modest gain (2.1 points) in the Personal Financial Pleasure Index and a slight (0.5 point) decrease in the Personal Financial Pain Index.

A surge in capital markets

“By and large the pleasure index factors have been trending up for some time as we have mostly recovered from the great recession,” said Mark Astrinos, CPA/PFS and member of the AICPA PFS Credential Committee. “While we all benefit from the surge of capital markets and real estate growth, it’s prudent that our financial health safeguards remain in place. This means ensuring that you re-balance portfolios to reduce risk and maintaining adequate cash reserves for when economic times are more challenging.”

The Personal Financial Pleasure Index, at 68.1, is up 2.1 points from the previous quarter, continuing its steady increase and setting a record for the third quarter in a row. The Real Home Equity Per Capita Index, based on data issued for April, experienced the largest increase over the previous quarter (4.8 points), though it remains significantly (16.3 percent) below the 2006 all-time high. The changes in home equity have been due to increases in the market value of real estate exceeding increases in mortgages outstanding.

The PFS 750 Market Index continues to be the biggest contributor to the Pleasure Index, a trend that began in 2009 and continued in Q3 as the component rose to a record high for the third quarter in a row. The U.S. economy has continued its steady expansion as corporate earnings are improving and interest rate policy remains accommodating. The strongest sectors have been performing well, with the banking sector leading the way followed by aerospace and defense.

Is this trend sustainable?

“As the stock market drives American’s financial satisfaction to new all-time highs, many are beginning to question whether this trend is sustainable,” said Robert Westley, CPA/PFS and member of the AICPA PFS Credential Committee. “As individuals begin to fear a pullback, it’s important to keep in mind that the stock market is largely unpredictable and any attempts to time the market often prove to be ineffective at best, and injurious at worst. An investor’s best defense against the market’s unpredictability is to have a solid financial plan that is irrespective of how the market is performing. It’s key to your financial plan to align your portfolio with your personal financial goals and their corresponding time horizons.”

The Personal Financial Pain Index, at 42.1, saw two factors decrease from the previous quarter, combining to drop the index 0.5 points which contributed to the overall improvement in the PFSi. The decrease from the preceding quarter was led by a 2.9 point decrease in loan delinquencies. Though the current reading of delinquencies on mortgages (3.93 percent) is well below the peak delinquency rate for mortgages (11.26 percent) set in the spring of 2010, it is still above what was typical between 1994 through 2003 (2.12 percent).

However, there is reason to believe we may see an increase in loan delinquencies in Q4. The recent onslaught of hurricanes and wildfires across the U.S. left more damage and affected a much larger area than Hurricane Katrina did in 2005. Though not reflected in Q3, it is logical to expect that we will see some negative impact from these storms in the quarters ahead. As a comparison point, Katrina ultimately led to a significant (34 percent) increase in delinquencies in the areas it damaged. Fannie Mae, Freddie Mac and the FHA have all announced a temporary moratorium on any actions as a result of mortgages going unpaid in storm devastated areas.

By and large the pleasure index factors have been trending up for some time as we have mostly recovered from the great recession

Also contributing to the decrease in the Pain Index was a 2.0 point drop in the inflation index (The Q3 Inflation Index relies on the Fed’s August level). The current value is 34, down 5.5 percent from 36 in Q2 and 42.4 percent above last year’s level. Inflation is the most volatile factor contributing to the PFSi and with absolute levels so low, small changes result in large percent gains, such as the 42.4 percent increase that still leaves it below the Fed’s target.

Additional Findings from the Q3 2017 PFSi:

The Job Openings Per Capita Index, the second largest contributor to the Pleasure Index, increased 3.6 percent (2.5 points) since the prior quarter, continuing its rise for the third quarter in a row. Compared to Q2, the strongest job growth has been in food services, professional and business services and health care. At a total of 6.2 million, overall job openings are setting records.
Personal taxes, still the leading overall contributor to financial pain for the sixth quarter in a row, showed a 1.9 point increase from the previous quarter and a 0.8 point increase from the prior year level.
The AICPA Economic Outlook Index, which captures the expectations of CPA executives in the year ahead for their companies and the U.S. economy, had a recent low point occur in Q1 2016. Since then, there has been an uptrend (about 5 percent per quarter for 2016), except for a slight retreat (1.3 percent) in Q2 2017. The survey was conducted in August.
Underemployment, at 39 points, is 2.8 percent higher than the previous quarter level but 13 percent below the prior year. In comparison, its peak value was 84.3 points in Q4 2009. It is still about 1.8 percent above its average value before the great recession.

Additional information on the PFSi can be found at:


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.

About the AICPA’s PFP Division

The AICPA’s Personal Financial Planning (PFP) Section is the premier provider of information, tools, advocacy, and guidance for CPAs who specialize in providing estate, tax, retirement, risk management, and investment planning advice to individuals, families, and business owners. The primary objective of the PFP Section is to support its members by providing resources that enable them to perform valuable PFP services in the highest professional manner.

CPA financial planners are held to the highest ethical standards and are uniquely able to integrate their extensive knowledge of tax and business planning with all areas of personal financial planning to provide objective and comprehensive guidance for their clients. The AICPA offers the Personal Financial Specialist (PFS) credential exclusively to CPAs who have demonstrated their expertise in personal financial planning through testing, experience and learning, enabling them to gain competence and confidence in PFP disciplines.




About the American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with more than 418,000 members in 143 countries, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for its members and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives professional competency development to advance the vitality, relevance and quality of the profession.

The AICPA maintains offices in New York, Washington, DC, Durham, NC, and Ewing, NJ.