Some Pain, No Gain: AICPA Personal Financial Satisfaction Index Decreases in First Quarter

April 27, 2016

NEW YORK (April 27, 2016) – Americans are feeling a little more financial pain in 2016, as the outlook for the U.S. economy has slipped and inflation has started to creep upwards. These two factors have caused the 2016 first quarter AICPA’s PFSi (Personal Financial Satisfaction Index) to decrease both on a quarterly and year-to-year basis, but the index remains firmly in positive territory, indicating that Americans financial pleasure outweighs their financial pain.

The PFSi measured 13.0 in the first quarter of 2016, representing a 2.1 point decrease from the prior quarter and a 0.3 decrease from one year ago. This decrease came from the Personal Financial Pleasure Index declining 0.4 points (0.7 percent) for the quarter, and a 1.7-point (3.9 percent) increase in the Personal Financial Pain Index. Also, the Personal Financial Pleasure Index declined compared to the first quarter of 2015, by 1.5 points, or 2.5 percent.

The PFSi weighs a variety of economic factors to determine the financial standing of a typical American. It is the result of calculating the difference between the Personal Financial Pleasure Index and the Personal Financial Pain Index. The PFSi uses both proprietary and normalized official U.S. government data.

The AICPA Outlook Index, which measures the views of CPAs who hold executive positions in U.S. companies on the economy and their businesses, was 20.4 percent lower than the prior year and 11.6 percent below the previous quarter, which was among the largest drivers of declines in the PFSi over both periods.

“Despite a slight dip in the PFSi this quarter, the economic picture was fairly positive. Housing prices are up, unemployment is down, and the stock market has been doing very well since mid-February,” said Michael Eisenberg, CPA/PFS, a member of the AICPA’s National CPA Financial Literacy Commission.  “However, during the next six months it’s important for people to remain focused on the factors that determine their personal financial satisfaction level. These indicators can easily get drowned out by the political discussions during the campaign season and make it more difficult for people to accurately gauge their financial well-being.”

Multiple components of the Pleasure Index ticked upward this quarter, including home prices. Areas in the South, Midwest and Northeast recorded some of the highest median home values for their markets, surpassing bubble peaks. Rising home values have freed about 10 million homeowners from negative equity in the past four years –which is reflected in the Real Home Equity Per Capita factor.

Job openings remained at historically high levels, with wholesale trade and construction emerging as the winning industries. Also on the job front, the underemployment rate was at a nine-year low, 2.3 percent lower than the last quarter and 13.3 percent below the prior year. In addition, the labor participation rate has finally become to climb. This may lead to a tightening of the job market and ultimately continue to drive the underemployment rate down.

Also, on a positive note, delinquencies on loans were down, 5.6 percent lower than the previous quarter and 22.7 percent lower than the same time in 2015.

The PFS 750 Market Index, which was near an all-time high in the first quarter of 2015, is currently 8.3 percent below that high. While there was a big drop in stock prices from the end of 2015 into early 2016, many of the losses reversed themselves and the overall market showed some gains for the quarter. Telecommunications and utilities stocks were the big winners, as health care and financials took a downturn.

Pleasure factors include the proprietary PFS 750 Market Index, comprised of the 750 largest companies by market capitalization trading on the U.S. markets, excluding ADRs, mutual funds and ETFs. The other components are the AICPA’s CPA Outlook Index, Real Home Equity Per Capita and Job Openings Per Capita. Pain factors include inflation, personal taxes, loan delinquencies, and underemployment.

Additional information on the PFSi can be found at:

For a more information on the PFSi index, contact James Schiavone at 212-596-6119,, or Marc Eiger at 212-596-6042,