Happiness Slump Weighs on US Consumer Sentiment: Goldman Sachs

Goldman Sachs economists are pointing to a decline in happiness as a key factor behind the recent slump in consumer sentiment. According to data from the University of Chicago's General Social Survey, overall happiness has decreased more than financial satisfaction over the past year.

The Michigan Consumer Sentiment Index has been at record lows this year, with a 13% drop from last year and an almost 8% decline from August. Goldman Sachs' Joseph Briggs believes that lower happiness is linked to declining trust in institutions, which accounted for a 'disproportionate amount' of the drop in net happiness.

Briggs argues that consumer sentiment may not recover even if the economy continues to grow, as it's driven by non-economic factors. This could make consumer sentiment a less reliable indicator of future economic trends.