Market Overview

Record Job Openings and Rebounded Market Guide Americans' Financial Satisfaction to All-Time High: AICPA Index

  • Americans' personal financial pleasure has never been higher.
  • Job openings & PFS750 Market Index both reach record high.
  • Inflation takes over as leading contributor to financial pain.
  • Pain from taxes only down 0.5 points (0.9 percent) from a year ago.

Americans continue to experience their highest levels of personal
financial satisfaction despite a rising interest rate environment,
according to the AICPA's Q2 2018 Personal
Financial Satisfaction Index
(PFSi). Personal financial
satisfaction was buoyed by a record number of job openings and a
rebounded stock market. The second quarter 2018 PFSi measured
27.7, a new all-time high for the index representing a 0.7 point (2.6
percent) increase from the prior quarter. This positive reading
indicates that the average American should be feeling a strong sense of
financial well-being.

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Q2 2018 Personal Financial Satisfaction index (Graphic: Business Wire)

Q2 2018 Personal Financial Satisfaction index (Graphic: Business Wire)

The Q2 2018 Personal Financial Pleasure Index measures 72.2, a 2.8 point
(4.0 percent) increase over the prior quarter. This gain establishes a
new all-time high for the Pleasure index. The most notable improvement
is in job openings per capita which increased 5.9 points (11.0 percent)
over the last quarter to 76, a new record high. Overall job openings set
records in the second quarter, with almost 6.7 million openings in
April. The number of job openings increased in professional and business
services, trade, transportation, warehousing, utilities and several
other industries. In May, the most American workers in 17 years quit
their jobs
, indicating strength in the job markets as more people
appear confident they can find a new job elsewhere, possibly at higher

"A great job market is the perfect time for Americans to shore up their
emergency fund, double check they're making the most of their work
benefits, and even consider shopping around to see if there is a better
financial opportunity in their field," said Kelley Long, CPA/PFS, member
of the AICPA's Consumer Financial Education Advocates. "In these times
of increased market volatility, the best thing to do is stay the course,
unless you're near retirement. If that's the case, then now is a great
time to rebalance your portfolio to ensure you have adequate cash set
aside, so that when the market does inevitably take a downturn, your
retirement plans aren't affected."

After declining last quarter for the first time since Q3 2015, the PFS
750 Market Index rebounded 4.3 points (5.2 percent) from its Q1 2018
level to 89 and has once again reached an all-time high. It remains the
leading contributor to the Pleasure Index as well as the PFSi
overall. This AICPA proprietary stock index is comprised of the 750
largest companies trading on the US Market adjusted for inflation and
per capita. In Q2, information technology led performance, followed by
consumer discretionary and health care, whereas real estate and telecom
delivered losses. According to Fidelity
the sturdy domestic economy bolstered US stocks in Q2,
especially small caps and REITs, which are less exposed to global trends
and trade risk. However, the market remained extremely volatile in the
second quarter.

The blended inflation measure for Q2 is 2.3 percent, an additional 0.6
percent higher than the prior quarter. This is above the Federal
Reserve's 2 percent target for inflation. The increase was largely due
to the price of gas, medical care, consumer goods and housing going up,
as measured by the Bureau of Labor Statistics. Inflation is the most
volatile factor contributing to the PFSi, and with absolute
levels still low by historical standards, small changes result in large
percent gains. In terms of the index, the blended inflation measure
value for Q2 is 54, an increase of 13.8 points (34.5 percent) from Q1.
With the significant increase, inflation is now the leading contributor
to the Personal Financial Pain index, narrowly overtaking taxes which
held the distinction for 8 consecutive quarters. Thanks largely to
inflation climbing to a 6-year
, the Personal Financial Pain Index measured 44.5 for Q2 2018, a
2.1 point (4.9 percent) increase from the prior quarter.

"With inflation surging to a 6 year high, this could signal the end of
its historical lows," said Michael Velazquez, CPA/PFS, member of the
AICPA's Personal Financial Planning Executive Committee. "Given
inflation's unpredictability, Americans should revisit the inflation
assumptions used in their financial plans, especially if in, or close
to, retirement."

The tax component of the Pain Index is particularly important when
measuring financial satisfaction because it is a distinct factor that
many Americans recognize. This is the second quarter to reflect the
impact of the Tax Cuts and Jobs Act. Even though the pain from taxes
declined 1.3 points (2.5 percent) from the prior quarter, they are only
0.5 points (0.9 percent) below the year-ago level, before the new tax
law was signed into effect. The personal taxes value uses information
from the Bureau of Labor Statistics on income tax, tax on realized net
capital gains and taxes on personal property.

Additional Findings from the Q2 2018 PFSi:

  • The AICPA CPA Outlook Index, which captures the expectations of CPA
    executives in the year ahead for their companies and the U.S. economy,
    retreated 1.8 points (3.3 percent) below the previous quarter. By
    region, organization optimism was strongest in the South, where it
    increased from the Q1 level. This measure decreased everywhere else.
    The next strongest reading was in the Midwest, which had just a small
    decline. The weakest measure, and with the largest decline, was in the
  • The Real Home Equity per Capita Index, at 68, increased a steady 1.2
    percent and is still 13.2 percent below its 2006 all-time high. The
    changes in value have been due to increases in the market value of
    real estate exceeding increases in mortgages outstanding.
  • Underemployment is 7.6 percent, down 8.6 percent from the Q1 2018
    level. In comparison, its peak value was 17.1 percent in the fourth
    quarter of 2009. Unemployment decreased in almost all industrial
    sectors over the last year.
  • Delinquencies on Loans Q2 level is 2.5 percent below the previous
    quarter's level. The improvements quarterly are mainly due to overall
    bank loans. Though the Q2 reading of delinquencies on mortgages (3.49
    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).

Additional information on the PFSi can be found at:

Personal Financial Satisfaction Index Methodology

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 431,000
members in 137 countries and territories, 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

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

Media representatives are invited to visit the AICPA Press Center at

About the Association of International Certified Professional

The Association of International Certified Professional Accountants (the
Association) is the most influential body of professional accountants,
combining the strengths of the American Institute of CPAs (AICPA) and
The Chartered Institute of Management Accountants (CIMA) to power
opportunity, trust and prosperity for people, businesses and economies
worldwide. It represents 667,000 members and students across 184
counties and territories in public and management accounting and
advocates for the public interest and business sustainability on current
and emerging issues. With broad reach, rigor and resources, the
Association advances the reputation, employability and quality of CPAs,
CGMAs and accounting and finance professionals globally.

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