US Consumer Sentiment Hits Record Lows Amid 'Lower Happiness'

Despite a solid economy, consumer sentiment in the United States has hit record lows. The University of Michigan's Consumer Sentiment Index fell 13% year over year in September, with a nearly 8% drop from August alone.

Economists have been struggling to explain why consumer sentiment remains depressed even as the economy continues to perform well on paper. Goldman Sachs economist Joseph Briggs attributed this disparity to 'lower happiness' at large.

According to Briggs, data from the University of Chicago's General Social Survey shows that happiness never fully recovered from a drop during the pandemic. The share of respondents feeling 'very happy' fell to 23% in 2024 from 31% in 2016, while the percentage reporting responses of 'not too happy' rose from 13% to 20% over the same period.

Briggs also noted 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.