Advertisement
The analysis from CEDA argues that Australians are experiencing a renewed rise in economic hardship, with the country’s “misery index” returning to near post-pandemic highs after all improvements since 2023 were reversed. The main drivers are persistent inflation, higher interest rates and a gradually weakening labour market. However, unlike the 2010s, unemployment is no longer the primary source of economic stress. Instead, inflation and borrowing costs are.
The “misery index”, originally developed by economist Arthur Okun, combines:
- Inflation
- Unemployment
- Interest rates
Advertisement
The index has risen back to near its post-pandemic peak after the gains made since 2023 were fully reversed. Contributing factors include:
The full text of this article is available to MacroBusiness subscribers
Cancel at any time through our billing provider, Stripe
About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
Advertisement