Consumer sentiment is in the dumps despite a solid economy. Goldman Sachs blames 'lower happiness'

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.