Arabic version: غولدمان يربط معنويات المستهلك بتراجع السعادة

According to Cnbc, Goldman Sachs says a broader decline in happiness may be helping to explain persistently weak consumer sentiment. The University of Michigan’s consumer sentiment index reached record lows this year, falling 13% year over year in September after dropping almost 8% from August.

Goldman economist Joseph Briggs told clients that low economic sentiment likely reflects a more downbeat assessment of the world than of the economy itself. Economists have questioned why sentiment has stayed depressed since the Covid pandemic despite measures such as gross domestic product growth and stock market performance presenting a stronger picture.

Briggs said inflationary pressures are likely weighing on confidence, but argued that “lower happiness” can partly account for the gap between sentiment and other indicators of economic performance. He cited the University of Chicago’s General Social Survey, which showed the share of respondents describing themselves as “very happy” fell to 23% in 2024 from 31% in 2016.

Over the same period, the share reporting they were “not too happy” rose to 20% from 13%, according to the survey data. Briggs’ analysis found that overall happiness declined more sharply than financial satisfaction, another measure tracked by the survey.

Goldman also connected lower happiness to reduced trust in public institutions. Briggs found that declining trust accounted for a “disproportionate amount” of the recent fall in net happiness. He said sentiment may not recover even if the economy continues to perform well, potentially making the indicator less useful for predicting economic dynamics.