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Goldman Sachs blames 'lower happiness' for struggling consumer sentiment
CNBC • • business
Key Points:
- Goldman Sachs economist Joseph Briggs attributes the decline in consumer sentiment largely to a broader societal drop in happiness, rather than purely economic factors.
- The University of Michigan's consumer sentiment index hit record lows in 2024, falling 13% year-over-year in September, with a notable 8% drop from August alone.
- Data from the University of Chicago's General Social Survey shows that the percentage of people feeling "very happy" decreased from 31% in 2016 to 23% in 2024, while those feeling "not too happy" increased from 13% to 20%.
- Declining trust in public institutions has contributed significantly to the drop in overall happiness, which in turn affects consumer sentiment.
- Due to these non-economic influences, Briggs suggests consumer sentiment may no longer reliably predict economic performance, even if traditional indicators like GDP growth remain strong.
