Goldman Sachs links weak consumer sentiment to lower happiness

Goldman Sachs says weak consumer sentiment in the U.S. may be tied not only to inflation, but also to broader declines in happiness and trust in institutions. The University of Michigan’s consumer sentiment index has fallen to record lows this year, including a 13% yearoveryear drop in September. Goldman economist Joseph Briggs said the persistent weakness may reflect a more general pessimism about society rather than only conditions in the economy. Briggs pointed to survey data showing that the share of Americans who say they are “very happy” has fallen since 2016, while the share saying they are “not too happy” has risen. He also cited evidence that lower trust in public institutions has helped weigh on overall happiness. The bank said consumer sentiment could remain subdued even if growth, stock market performance, and other economic indicators stay relatively strong. That could make sentiment a less reliable signal of nearterm economic conditions.