Goldman Sachs says 'lower happiness' — not the economy — explains why consumer confidence hit its second-lowest level

Godwin Oluponmile

Tue, September 22, 2026 at 6:30 AM PDT 5 min read

Consumer confidence fell to its second-lowest level on record in September, and Goldman Sachs says the economy is only part of the reason. Americans, the bank told its clients, have grown unhappier with the state of the world in general.

In a note to clients reported by CNBC on September 19, Goldman economist Joseph Briggs wrote that "low reported economic sentiment likely reflects a more fundamental, downbeat assessment of the state of the world rather than the economy." "Lower happiness" across the country, he said, helps account for the gap between the grim survey results and data like GDP growth that show the economy expanding.

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The index comes from the University of Michigan's Institute for Social Research, which has tracked how households feel about their personal finances, business conditions and buying conditions since 1952. Wall Street treats it as one of the main gauges of consumer confidence. The preliminary September reading, released September 11, fell 7.5% from August and 13.2% from a year earlier. The only lower figure on record was May's 44.8.

For perspective, COVID-19 never pushed the index below 71.8, and the Great Recession era's low was 55.3. May's 44.8 came in under both.

Meanwhile, the Federal Reserve raised rates a quarter point on September 16 to a range of 3.75% to 4%, its first hike since 2023.

Fed Chair Kevin Warsh said the central bank moved because inflation "is too high and has been for too long," while pointing to improved job openings, unemployment rates and business investment as evidence of the economy's resilience.

So how can people feel this bad about an economy their own central bank considers resilient? Economists have been asking some version of that question since the pandemic, and Briggs' note is Goldman's attempt at an answer.

What the happiness data shows

Briggs pulled his evidence from the University of Chicago's General Social Survey, which has asked Americans about their lives since 1972. In 2016, 31% of respondents told the survey they were "very happy." By 2024, that was down to 23%. The share answering "not too happy" went the other direction over those years, from 13% to 20%. Briggs noted that happiness fell during the pandemic and hasn't returned to its pre-pandemic level.