Goldman: Happiness Drop Explains Sour Consumer Sentiment — SkimNews
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- University of Michigan's consumer sentiment index fell 13% year-over-year in September (down 8% from August alone), hitting record lows despite GDP and market strength.
- Joseph Briggs, a Goldman Sachs economist, wrote to clients that low sentiment "likely reflects a more fundamental, downbeat assessment of the state of the world rather than the economy."
- University of Chicago's General Social Survey showed "very happy" respondents falling from 31% in 2016 to 23% in 2024, while "not too happy" rose from 13% to 20%—with happiness declining more sharply than financial satisfaction.
- Joanne Hsu, director of the Michigan survey, separately cited decreasing happiness and declining trust in public institutions as drivers of the downtrend.
- Briggs found lower trust in institutions caused a "disproportionate amount" of the decline in net happiness in recent years.
- Briggs warned sentiment readings may not rebound even if the economy keeps growing, making the index a less useful predictor of economic dynamics.
Why it matters: Briggs warned that consumer sentiment readings may not improve even if the economy keeps growing, making the Michigan index a less useful predictor of economic dynamics for the analysts and policymakers who rely on it to gauge future spending and growth.
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