“Local optimism” a bit better than last year.
The CPA Trendlines Busy Season Barometer
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By CPA Trendlines Research
When CPAs talk about the economy, people listen. They listen because accountants have their finger on the pulse of the economy. They look at real numbers all day. They look at where the numbers are coming from and where they’re probably going. It’s what they do.
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For that reason, CPA Trendlines’ 2020 Busy Season Barometer steps back from strictly tax issues to ask how things look economically. The answers are always interesting.
Last year, respondents looked a little concerned about the national economy. A good 37 percent figured it would chug along without much change, but those who saw a downturn, slight or serious, added up to 36 percent. Those who expected economic improvement accounted for only 26 percent.
The government shutdown in January 2019 might explain some of the national pessimism. Everyone was frustrated, and no one knew what to expect.
This year, much to its credit, the federal government has managed to keep its doors open right up through the end of January, even if Congress was a bit … let’s say distracted from economic issues. Barometer respondents are appropriately bullish. Not extremely bullish, but more so than last year. Forty-one percent see a better economy in the pipeline, and only 22 percent see things getting worse.
Robert Hniedziejko, reporting in from New Jersey with hopes of a much better economy, explains it: “Donald Trump Baby!! He is doing a great job with the economy!!”
On the other side of the country and the economic spectrum, Don Wayne, in Walnut Creek, Calif., explains his “somewhat worse” expectations: “It depends on getting rid of Trump.”
Note, however, that those are numbers for the national economy as a whole. The Barometer also asks how Trendlines peers think the economy will affect their clients, their own firms and their families. The results are relatively sunny.
A minuscule 0.61 percent think their clients will be much worse off, and precisely 0.0 percent expect downturns for their own practices and families. Even the “somewhat worse” numbers are low – 6.71 percent for clients, 5.59 percent for firms and 6.13 percent for families.
Compare that with 18, 10 and 11 percent, respectively, last year.
The numbers for those who expect little change were within a couple of percentage points of last year’s numbers. That leaves big numbers on the optimistic side of the spectrum – big beautiful numbers. Just over 44 percent think their clients will do “somewhat better” this year, compared with only 29 percent last year. Optimistic expectations for their own firms and own families are close: 56 percent for their firms, 52 percent for their families.
But the guarded optimism still leaves one in five respondents sensing problems in the offing. Some of the pessimism may be because of pockets of economic stagnation. We don’t know where Teresa Salyers works, but she says, “This area is a depressed part of the country anyway, but we are getting closer to having the house paid off. D.C. will not allow for growth because of infighting.”
Note, however, that these early responses came in just as the Senate impeachment trial got underway and the coronavirus started popping up all over the world, the worst-case scenario threatening to seriously hamper China’s ability to deliver goods that the rest of the world needs. Based on 20 years of the Busy Season Barometer, respondents will probably get gloomier later in February.