Fed chief sees happiness as economic gauge

WASHINGTON – Ben Bernanke wants to know if you are happy.

The Federal Reserve chairman said Monday that gauging happiness can be as important for measuring economic progress as determining whether inflation is low or unemployment high. Economics isn’t just about money and material benefits, Bernanke said. It is also about understanding and promoting “the enhancement of well-being.”

Bernanke and Fed policymakers rely on reports on hiring, consumer spending and other economic data when making high-stakes decisions about the $15 trillion U.S. economy. The Fed’s dual mandate is to maintain low inflation and full employment.

“We should seek better and more-direct measurements of economic well-being,” Bernanke said Monday. After all, promoting well-being is “the ultimate objective of our policy decisions.”

Bernanke acknowledged that many people aren’t too happy right now. Unemployment rose in July to 8.3 percent, and economic growth has slowed sharply from the start of the year.

Aggregate statistics can mask important information about how Americans are faring, Bernanke says.

His speech Monday was the latest foray into a relatively new specialty in economics known as “happiness studies.” Bernanke attracted notice when he spoke about the economics of happiness in a May 2010 commencement address at the University of South Carolina.

Bernanke on Monday sketched out a few other questions he would like to know: How secure do Americans feel in their jobs? How confident are Americans in their future job prospects? How prepared are families for financial shocks?

These indicators “could be useful in measuring economic progress or setbacks as well as in explaining economic decision-making,” Bernanke said.