Goldman Sachs Says Lower Happiness May Be Weighing On U.S. Consumer Sentiment

According to CNBC, Goldman Sachs economist Joseph Briggs said declining happiness may be helping explain why U.S. consumer sentiment has stayed weak even as other measures of the economy have held up. Briggs wrote to clients that low reported economic sentiment likely reflects a broader negative view of the state of the world rather than the economy alone, and he said inflation is also likely hurting confidence. He pointed to University of Chicago General Social Survey data showing the share of respondents who felt "very happy" fell to 23% in 2024 from 31% in 2016, while the share saying they were "not too happy" rose to 20% from 13% over the same period. Briggs also said lower trust in institutions has contributed to the decline in net happiness and warned consumer sentiment may not improve even if the economy keeps growing.