Americans’ personal financial satisfaction fell in the fourth quarter for the first time in seven quarters as market volatility took a toll on their confidence, the American Institute of CPAs reported Thursday.

The AICPA’s personal financial satisfaction index clocked in at 30.9, a 1.4 drop from the third quarter that erased 24% of the index’s gains from the previous three quarters.

The report noted that this was only the fourth time the index had decreased since clawing its way up from a -42.0 bottom in the 2011 third quarter.

If there was any good news, it was that even with the decline, the PFSi was still solidly in positive territory and not too far from recent record highs.

The PFSi is calculated as the Personal Financial Pleasure Index minus the Personal Financial Pain Index, with positive readings signaling that Americans are feeling more financial pleasure than pain.

The PFSi’s decrease was due to a 4.1-point decline in the Pleasure Index that outweighed a slight boost from a 2.6-point decrease in the Pain Index — a decline in the Pain Index improves the PFSi overall, according to the AICPA.

Pleasure Index

According to the AICPA, the fourth-quarter pleasure index, which comprises four equally weighted factors, was down 4.1 points to 70.2, ending nine straight quarters of record highs.

A 13.4-point drop in the PFS 750 Market Index drove the pullback. This AICPA proprietary stock index is made up of the 750 largest companies trading on the U.S. market adjusted for inflation and per capita.

All sectors declined, wiping out all of the PFS 750 gains from the three prior quarters and dropping the index to just below its fourth-quarter 2016 value. Worst hit were energy and industrials, while utilities had the most modest losses.

As a result of the sharp quarterly decline, the PFS 750 Market Index is no longer the biggest contributor to financial pleasure for the first time in nearly a decade.

“The recent stock market decline is a good reminder to focus on the long-term goals of your financial plan, and don’t let yourself be influenced by the prevailing financial winds,” Dave Stolz, a member of the AICPAs’ PFS credential committee. “Even with the recent market turbulence, economic conditions overall in the U.S. remain strong.”

Along those lines, the Job Openings Per Capita Index, which is now the largest contributor to the pleasure index for the first time since the 2001 second quarter, decreased a negligible 0.2 points, keeping it near its third-quarter record high. It increased 12.2 points from a year earlier, with gains in almost every sector.

Although the U.S. Federal Reserve has yet to release final December job numbers, 2018 is on pace to set a new record for job creation based on numbers through November, according to the AICPA. After 11 months, 2018 was averaging 870,000 jobs added a month. This compared with 2015, the biggest year on record for added jobs — an average of 802,000 jobs added each month.

The AICPA CPA Outlook Index, which captures the expectations of CPA executives in the year ahead for their companies and the U.S. economy, fell 2.8 points from the previous quarter. At a reading of 52, the fourth-quarter index was at the same value as in the first quarter of 2017. Despite the decline, it remained solidly in positive territory.

The Real Home Equity Per Capita Index, based on data issued for July, was 4.6% above the prior year value and 0.2% ahead of the previous quarter, but still 11.5% below its 2006 all-time high. The changes in value have been due to increases in the market value of real estate, which for the most recent reading came in just over 6% per annum.

Pain Index

Three factors that contribute to the pain index combined to drop the index 2.6 points to 39.3. The decrease from the preceding quarter was led by an 8.9 point drop in the inflation Index, which is now at its lowest rate since February 2018 and no longer the leading contributor to the pain index.

The fourth-quarter Inflation Index, which relies on the Federal Reserve’s November level, was 1.8%, still below the Fed’s 2% target for inflation.

Thanks in part to inflation’s quarterly decline, the Personal Taxes Index again became the leading contributor to financial pain — a title it has held eight of the last 10 quarters. However, compared with the year-earlier level, pain from taxes was down 4.5 points.

In the 2018 first quarter, the first to show the effect of the tax overhaul enacted in 2017, pain from personal taxes dropped 4.14 points from the 2017 fourth-quarter level. Since then, the 2018 quarterly level was approximately flat.

Among other statistics, the Personal Taxes Index uses information from the Bureau of Labor Statistics on income tax, tax on realized net capital gains and taxes on personal property.

“Early in 2018, the IRS updated the withholding tables as a result of the … tax rate changes,” Julie Welch, a member of the AICPAs’ personal financial planning executive committee, said in the statement.

“In many cases, the federal withholding decreased, which resulted in Americans seeing a bit more money in each paycheck. However, those that didn’t check their withholding may be surprised by smaller than usual refund, or worse yet, a balance due.”

Last year, Americans received an average tax refund of $2,899, according to the IRS. This year, with household debt at an all-time high of $13.5 trillion, more than a quarter of Americans plan to use their upcoming tax refunds to help pay off debt, the AICPA said.

“The government shutdown has brought increased attention to the need for an emergency fund as we are reminded that many Americans live paycheck to paycheck,” Welch said. “It’s a good idea to use at least part of a tax refund to pay down debt and start an emergency fund so if someone does happen to unexpectedly find themselves out of work or with an unexpected expense, they can help avoid negative financial consequences.”

The Loan Delinquencies Index dropped 2.4 points from the third quarter, with the improvement mostly related to mortgages. This factor’s current level is 18.7% lower than the prior year level, and is at its best level since the end of 2007.

Although the current reading of delinquencies on mortgages, 3%, is well below the peak delinquency rate of 11.3% set in the spring of 2010, it is still above the 2.1% that was typical between 1994 and 2003, the AICPA said.

The Underemployment Index, at 34, is 2.1 points lower than the prior year level and 1.1 point above the third quarter level. In comparison, its peak value was 84.3 in the fourth quarter of 2009. It is now 10% below its average value in the two years before the recession.