A drop in the number of job openings and in corporate optimism helped drive the AICPA’s Q3 2019 Personal Financial Satisfaction Index down slightly in the third quarter, but it remains near an all-time high.
The AICPA said its
The decline from the second quarter was largely due to a drop in the AICPA CPA Outlook Index, which skidded 2.8 points (5.5 percent), followed by a 2.1 point (2.6 percent) drop in job openings. The AICPA CPA Outlook Index measures the expectations of CPA executives in the year ahead for their companies and the U.S. economy. Its decline from the second quarter was mainly due to a 15-percentage point decline in optimism about the U.S. economy’s outlook over the next 12 months. That means, while Americans are experiencing near record high levels of financial satisfaction, CPA executives have become somewhat more concerned about the potential for an economic downturn in the year ahead.
“It’s important for Americans to keep in mind that economies are cyclical,” said David Desmarais, a member of the AICPA Personal Financial Planning Executive Committee, in a statement Thursday. “Now is the perfect time for Americans to check in on their financial plans to make sure that everything is in order. That may mean making sure they aren’t overextended with debt (whether it be credit cards, lines of credit, auto loans, or home mortgages), and talking to their CPA about their goals, asset allocation, time horizon and risk tolerance.”
After passage of the Tax Cuts and Jobs Act at the end of 2017 prompted an initial decline of 7.5 percent (3.9 points) in the financial pain component of the index in the first quarter of 2018, the quarterly levels have been relatively flat ever since then. Taxes continue to be an outsize contributor to financial pain. Over the past three years, the personal taxes factor has been the biggest contributor to financial pain for 10 of 12 quarters. Pain from loan delinquencies is down 1.4 points (4.7 percent) from the previous quarter.
