The latest installment of our Accountants Confidence Index, and the first from the new year, broke with the holiday season's more optimistic outlook. The ACI, created in partnership with ADP, is a monthly economic indicator that leverages the insights of accountants into the strength and prospects of businesses in the U.S.

Both the 3-Month and 6-Month ACI readings for this month dropped sharply this month, with our panel foreseeing contraction for the U.S. economy in both the short- and the mid-term. They also foresaw a short-term contraction for their small-business clients -- a first since we started publishing the ACI.

We also asked our panel about how their firm handles the human resources function; their answers are posted below.

The ACI is created from a monthly poll of the Accounting Today Executive Research Council, an online community of more than 1,500 tax and accounting professionals, who are asked to provide their estimates of the growth prospects of their own firms, their small, midsized and large business clients, and of the U.S. economy as a whole. Their responses are weighted and averaged to produce the ACI.