Personal financial satisfaction hits new 24-year high
Record-breaking financial joyride continues for Americans’ pocketbooks.
From one record high to another, the Personal Financial Satisfaction Index of the Association of International Certified Professional Accountants continued to surge higher with a new all-time record for the fourth quarter of 2017.
The measure of citizens’ financial pleasure vs. pain rose for the seventh straight quarter to 26.9, a gain of 4.7%.
Factors pushing the index into uncharted territory include the runaway bull market in stocks, rising home equity, a positive outlook for the future and plentiful job openings. All three major US stock indices – the Nasdaq Composite Index, S&P 500 and Dow Jones Industrial Average – have recently hit new record highs, and job openings are just off a record high of their own in the third quarter of 2017.
The biggest pain point last quarter was personal taxes, and most Americans are about to get a break from that, too, thanks to the passage of the Tax Cuts and Jobs Act. Our previous news coverage of the tax reform bill cited an independent analysis that showed average taxpayers will save $1,200. The other categories of financial pain for consumers are still relatively low, including inflation, loan delinquencies and underemployment.
However, inflation is on the rise as the Federal Reserve seeks to boost that percentage from the current 1.5% to its target of 2%. That means the cost of borrowing money is likely to rise in the future through increasing interest rates.
The Personal Financial Satisfaction Index isn’t the only sign that good times are likely to continue, either. Credit scores haven’t looked as good as they do now since 2012, credit scoring agency TransUnion is predicting bigger loans and fewer missed payments this year, new homes are flying off the market and household incomes are growing.
On the other hand, credit card debt is also at an all-time high.