Consumer sentiment is in the dumps despite a solid economy. Goldman Sachs blames 'lower happiness'
www.cnbc.com
Goldman economist Joseph Briggs said broader pessimism in society may be contributing to struggling consumer sentiment even as the economy chugs along.

Goldman Sachs identified a potential culprit for sour consumer sentiment readings: A decline in happiness.

The consumer sentiment index tracked by the University of Michigan hit record lows this year. The index fell 13% year over year in September, due to a drop of almost 8% from August alone.

Economists have widely questioned why sentiment has remained depressed since the Covid pandemic, even as the economy hummed along on paper. Goldman economist Joseph Briggs told clients this week that the downward pressure may stem from broader pessimism in society.

“Low reported economic sentiment likely reflects a more fundamental, downbeat assessment of the state of the world rather than the economy,” Briggs wrote to clients.

Its not the escalating COLA? It definitely isn’t the coming disel crunch. It’s just a sour mood?

You know what helps me when I am in a bad mood? Comfort food. Maybe this Goldman guy should advise that the government let the people eat cake. That sort of advice has always had a good outcome.

  • ltxrtquq@lemmy.mlEnglish
    6·
    9 hours ago

    To be sure, Briggs said inflationary pressures are likely also hurting confidence. But he said “lower happiness” at large can partially explain the continued disconnect between sentiment and other measures of the economy’s performance, such as gross domestic product growth or stock market performance, that offer rosier views.

    It’s almost shocking how out of touch they are. The wealthiest 10% of Americans own 93% of stocks according to a 2024 article.

    Briggs also cited a connection between lower overall happiness readings and decreasing trust in institutions. He found that lower trust in these bodies caused a “disproportionate amount” of the decline in net happiness in recent years.

    Given the connection to non-economic variables, consumer sentiment readings may not improve even if the economy continues chugging along, Briggs said. As a result, consumer sentiment may become a less useful predictor of economic dynamics, he said.

    It’s like a parody, or something the onion would write. Economists aren’t serious people.