Goldman Sachs has highlighted a troubling trend in consumer sentiment, which has reached record lows according to the University of Michigan's index, falling 13% year over year as of September.
This decline is attributed to a significant drop in reported happiness levels, with economist Joseph Briggs noting that the sentiment reflects a more fundamental pessimism about the world rather than just economic conditions.
Data from the University of Chicago's General Social Survey shows that the percentage of respondents feeling 'very happy' decreased from 31% in 2016 to 23% in 2024, while those feeling 'not too happy' increased from 13% to 20%. This decline in happiness correlates with decreased trust in public institutions, which Briggs argues has disproportionately affected overall happiness.
As a result, even if economic indicators like GDP growth remain positive, consumer sentiment may not improve, potentially diminishing its role as a predictor of economic dynamics