New AICPA data indicates Americans' personal financial satisfaction has hit a level unseen since Q3 2007, due largely to a rise in job openings, home equity values and reduction in loan delinquencies.
According the Q2 2015 PFSi (Personal Financial Satisfaction Index) released by the Institute, the PFSi index measured 15.0, representing a 1.9 point increase from the prior quarter and an 18.2 point increase from one year ago. Inflation, now registering at historically-low levels, was also a contributing factor in the PFSiincrease from the previous quarter.
In addition, the U.S. housing market is slowly returning to pre-recession levels. This is captured in the Personal Financial Pleasure Index as gains in real home equity per capita â which is largely the result of increases in the market value of homes, with many U.S. cities continuing their slow but steady rebound. Another large contributor to the rise in the PFSiis the PFS 750 Market Index. The index has set new highs in the past year, although it was lower this quarter than in than first quarter.
Also, while the second quarter represents a post-recession high for the PFSi, the quarterly increase was the smallest in the past four quarters, and represents a slight slowing of momentum.
âThe PFSi is making slow, but steady progress further into positive territory in 2015 â which is what Americans have been feeling in their personal financial situations,â said Bob Fay CPA/PFS and a member of the AICPA's National Accreditation Commission. âWhile potentially worrisome international news has dominated recent economic headlines in the U.S. â Greece's protracted debt negotiations with Europe, uncertainty with the Chinese stock market â there has been limited impact to date on the PFSi and therefore on the financial standing of the average American.â
The driving factor in the rise of the PFSi is the reduction in the Personal Financial Pain Index by 1.6 points. The continued easing of Pain Index factors has driven increases in Americans' overall financial satisfaction, while the Pleasure Index largely held steady.
The Personal Financial Satisfaction Index (PFSi) 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