With recent decreases in inflation, personal taxes, and underemployment, Americans’ overall financial satisfaction has further ticked into positive territory, according to the Q1 2015
The PFSi—which weighs a variety of economic factors to calculate the financial standing of a typical American —measured at 13.1 for the first quarter of 2015, reflecting a 6.5 point increase from the prior quarter and an 18.4 point increase from one year ago.
While the "Pleasure Index" score—driven by improvements in job openings (up 2.6 percent) and real home equity (up 1.7 percent)—advanced slightly (up .2 points) from last quarter, the vast majority of the overall gain of the PFSi is attributed to the 10.5 decline in the "Pain Index." Much of this gain can be attributed to a decrease in inflation, driven by a dramatic decline in oil prices in the last quarter.
“The increase in the PFSi signifies that the average Americans' financial situation should be in better shape now than it was prior to the start of the year,” stated Susan Tillery, CPA/PFS and member of the AICPA’s PFP Executive Committee. “As inflation has decreased and more people are finding full time work, this is an opportune time to analyze your personal financial plan and take steps to build up reserves and refinance high interest debt.”
The largest contributing factors to reductions in the Pain index score this quarter were inflation (which declined 20 points), loan delinquencies (which declined 5 points), and underemployment (which declined 2 points). Personal taxes also declined by two points from last quarter.
“Despite slight advances and declines within the financial pleasure and pain factors in the last quarter, the continued improvement in the PFSi score indicates that Americans’ financial opportunities have continued to expand faster than their potential loss in financial well-being,” added Tillery. “Now is an excellent time for Americans to be reviewing their own financial situation with a CPA financial planner. This relationship will help them feel more confident in their decisions and financial strategies going forward.”
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.
For more information on the PFSi, head to the AICPA's site
