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A new study from the American Institute of CPAs measures financial success in a whole new way.

Something called the “Financial Pleasure Index” says that you’re probably going to have a good year in 2015.

The American Institute of CPAs just released a study saying that Americans are pleased with their overall finances — at least, more than last year. This year’s magic number stand at 6.6 points, an improvement of 14.9 points since this time last year.

How’d they get that number? They created the Financial Pleasure Index, which measures things like the stock market and CEO expectations for growth, and the Financial Pain Index, which measures “pains” like underemployment and inflation. Then they smushed them together into a third statistic — the Personal Financial Satisfaction Index, or PFSi.

“What we were trying to do is come up with an index that can measure the financial stance of a typical American,” says Bob Fay, a CPA based in Canton, Ohio. Fay and his fellow members of the AICPA came up with “a variety of different indicators to map trends and reflect upon [financial reality] as we see it from the day to day Americans that CPAs interact with.”

But are the Americans that CPAs interact with representative of all of us? That’s an open question. Let’s look at what the PSFi measures, and how…

What do all these different numbers and calculations mean?

Although the PSFi was just launched, they looked at historical data too. Its results should “be reflective of how the average American has economically handled the last 10 years,” Fay says. AICPA plans to update the index quarterly.

So why is it starting at +6.6? According to the AICPA…

  • The biggest contribution to the improved results is a “substantial decrease in loan delinquencies,” including credit cards and mortgage loans, which decreased from 3.8 to 2.9 percent in the last quarter of 2014;
  • An increase of job openings, which went from 4 million to 4.8 million;
  • The improving stock market, which scored 7 points higher than the the previous quarter and is sitting at its all-time high.

The PSFi is calculated by subtracting the Financial Pain Index from the Financial Pleasure Index. Each of those has four components, all weighted equally.

On the pleasure side, AICPA crunches a proprietary index based on the 750 largest American companies, home equity and job openings across the country, and “the expectations of CEOs, CFOs, Controllers, and other CPA executives and their plans for a breadth of indicators of economic activity within their own organizations.”

On the pain side, they look at inflation, personal taxes, loan delinquency data, and underemployment.

“It’s the same calculation of both indices, so we’re not changing the definitions every quarter,” Fay says. “Components of the index stay the same and their weight stays the same. And the index will become a true index and won’t be manipulated or changed based on a good number or a bad number.”

Is it accurate?

Why should you trust a group of CPAs making assessments about the economy?

“CPAs are used to working with hard numbers every day,” Fay says. “We’re a very hard-number type of people. It’s good that this index is made up of hard numbers, not measuring sentiment or how people feel.”

But sentiment can sometimes be telling. For example, look at the recent figure the U.S. Bureau of Labor Statistics gave for unemployment in the month of January: 5.7 percent. Gallup CEO Jim Clifton, whose company publishes a weekly consumer confidence study, recently called that number a “big lie.” He says it doesn’t fully account for “as many as 30 million Americans are either out of work or severely underemployed.”

“When the media, talking heads, the White House and Wall Street start reporting the truth — the percent of Americans in good jobs; jobs that are full time and real — then we will quit wondering why Americans aren’t ‘feeling’ something that doesn’t remotely reflect the reality in their lives,” he added.

AICPA tries to account for those folks by measuring underemployment, but there are others who don’t get measured well in this index.

After the recession, millions more Americans started renting instead of owning homes, so they don’t get counted in the Financial Pleasure index. CEO expectations don’t necessarily align with the average worker’s. And fewer than half of all Americans participate in the stock market in any way, another factor in the pleasure index.

Alternatively, everyone feels the effects of inflation and personal taxes — pleasure for some, pain for all.

What it means for Americans, anecdotally

Fay is a sole practitioner CPA in a town of 72,000 in northeastern Ohio. That means he interacts often with small business owners.

“I deal with mom-and-pop business owners and a variety of individuals. I probably deal with around 300 business owners on a yearly basis,” Fay says. And from experience and what he hears from other CPAs, the data and the people add up.

“In my opinion, and in my practice, it definitely reflects how my clients are feeling better about the economy and the economy is getting better,” Fay says.

Fewer loan delinquencies and bankruptcies, real estate prices going back up: Those “rang true” for Fay when he saw the results of the index. And looking at the 10 years of historical data AICPA calculated the PSFi for, the trend line looks roughly right. It hit its high-water mark of 25 in 2007, and rock-bottom at -35 in 2011. Now it’s at 6.6.

“We’re not anywhere near where we were before the Great Recession, but we are on a positive upswing,” Fay says.

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Meet the Author

Jess Miller

Jess Miller


Miller is the former assistant editor of



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