Consumer Sentiment Hits Record Lows Amid Economic Resilience, Goldman Sachs Attributes to Declining Happiness
The University of Michigan's consumer sentiment index reached record lows this year, with a significant drop in September. Despite the economy performing well on paper, economists are attributing weak sentiment readings to broader societal pessimism and declining happiness levels rather than purely economic factors. Goldman Sachs economist Joseph Briggs suggests that low reported economic sentiment reflects a more fundamental downbeat assessment of society's state. He points to data showing that post-pandemic happiness has not recovered fully, with the share of people feeling 'very happy' dropping from 31% in 2016 to 23% in 2024. Briggs also highlights a connection between declining trust in public institutions and reduced overall happiness. This shift may make consumer sentiment less useful as an economic indicator, even if the economy continues strong.
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Topics: consumer sentiment economic pessimism happiness trends inflation impact