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The essentials at a glance
Consumer sentiment has weakened despite a resilient economy, with Goldman Sachs pointing to broader unhappiness and declining trust.
Consumer sentiment has weakened despite a resilient economy, with Goldman Sachs pointing to broader unhappiness and declining trust.
📝 Key Takeaways
- Consumer sentiment hits a low: Consumer sentiment remains unusually weak even as broader economic measures have looked stronger.
- Consumer confidence and happiness: Goldman Sachs economist Joseph Briggs argues that lower happiness may be part of the explanation for persistently downbeat economic sentiment.
- Consumer sentiment and trust: Briggs also connected declining happiness with falling trust in public institutions.
✅ Fact-Check Snapshot
- The University of Michigan’s consumer sentiment index fell 13% year over year in September.
- The share of respondents reporting that they were “very happy” fell to 23% in 2024 from 31% in 2016.
- Briggs found that lower trust in institutions caused a disproportionate amount of the decline in net happiness in recent years.
Consumer sentiment hits a low
Consumer sentiment remains unusually weak even as broader economic measures have looked stronger. The University of Michigan’s index fell 13% year over year in September, adding to the gap between how the economy appears on paper and how households feel about it.
That disconnect can matter when people weigh major purchases, including a home. A buyer who feels broadly uncertain may be more cautious about taking on a mortgage, even when other economic indicators appear comparatively steady.
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Consumer confidence and happiness
Goldman Sachs economist Joseph Briggs argues that lower happiness may be part of the explanation for persistently downbeat economic sentiment. Data cited from the University of Chicago’s General Social Survey show that the share of respondents describing themselves as “very happy” fell to 23% in 2024 from 31% in 2016.
If those broader feelings remain weak, consumer confidence may not recover in step with economic output or financial markets. That makes sentiment a less straightforward guide to household decisions than it might be when financial and social outlooks move together.
Consumer sentiment and trust
Briggs also connected declining happiness with falling trust in public institutions. His analysis found that lower trust in those institutions caused a disproportionate amount of the decline in net happiness in recent years.
The implication is conditional rather than a forecast: consumer sentiment may stay subdued even if the economy continues to perform well. For mortgage shoppers, that could mean confidence does not automatically follow headline economic strength.
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